Core Viewpoint - The report from Xinda Securities indicates that Shaanxi Natural Gas experienced a decline in net profit in the first half of the year, but strategic investments and pricing adjustments are expected to support stable growth in performance [1] Financial Performance - Shaanxi Natural Gas achieved a net profit attributable to shareholders of 509 million yuan, a year-on-year decrease of 12.62% - The non-recurring net profit was 497 million yuan, reflecting a year-on-year reduction of 4.12% [1] Strategic Initiatives - The introduction of strategic investors is aimed at enhancing industrial synergy, which is anticipated to positively impact the company's performance - The company is a major operator of long-distance natural gas pipelines in Shaanxi Province, benefiting from high-quality pipeline assets [1] Business Model and Growth Potential - The business model of the long-distance pipeline operations ensures relatively stable profitability and good cash flow, along with strong dividend capacity - Existing pipeline capacity is expected to ramp up, with key pipelines under construction projected to be operational by 2026-2027, contributing to long-term growth [1] Future Projections - The group’s urban gas projects are expected to be gradually injected into the company, further driving performance growth - The adjusted net profit forecasts for Shaanxi Natural Gas for 2025, 2026, and 2027 are 707 million yuan, 752 million yuan, and 781 million yuan respectively, with corresponding EPS of 0.64 yuan, 0.68 yuan, and 0.70 yuan [1] Valuation Metrics - The price-to-earnings (PE) ratios corresponding to the closing price on August 25 are projected to be 13.98X, 13.14X, and 12.65X for the years 2025, 2026, and 2027 respectively - The company is maintained with an "overweight" rating due to its stable profit growth and high dividend quality [1]