Core Viewpoint - The company reported a slight increase in revenue for the first half of 2025, but a decline in net profit, primarily due to decreased overseas LNG sales profits, while domestic business showed steady growth [1] Financial Performance - In H1 2025, the company achieved revenue of 55.67 billion yuan, a year-on-year increase of 2.0%, while net profit attributable to shareholders was 2.43 billion yuan, down 5.6% [1] - Core profit for H1 2025 was 3.22 billion yuan, a decrease of 1.2% year-on-year, aligning with market expectations [1] - The company maintained a dividend of 0.65 HKD per share, unchanged from the previous year, with a core profit payout ratio of 21% [1] Business Segments - Domestic business showed steady growth with core profit of 3.10 billion yuan, up 0.7% year-on-year, while overseas LNG sales profit fell to 120 million yuan, down 33.8% [1] - Natural gas retail segment reported a gross profit of 3.092 billion yuan, a decrease of 1.5% year-on-year, with gas volume increasing by 1.9% to 12.95 billion cubic meters [1] - Connection business gross profit was 820 million yuan, down 0.5%, with new residential connections decreasing by 10.7% to 692,000 households [1] - The energy business reported a gross profit of 1.09 billion yuan, up 2.1%, with installed capacity increasing by 8.5% to 13.9 GW [1] - Smart home business gross profit was 1.47 billion yuan, an increase of 4.9%, with the average customer price rising to 649 yuan per household [1] Privatization and Valuation - The privatization of the company is progressing smoothly, with a transaction price of 59.924 billion HKD, corresponding to a 12x PE ratio based on 2024 core profit [1] - The implied price per share is 80 HKD, indicating a 27% upside from the closing price on the valuation date [1] - The major asset restructuring has been filed with the National Development and Reform Commission [1] Earnings Forecast and Investment Rating - The earnings forecast for 2025-2027 has been revised down to 7.09 billion, 7.42 billion, and 7.80 billion yuan, reflecting a year-on-year growth of 18.4%, 4.6%, and 5.2% respectively [1] - The current PE ratios are 9.2, 8.8, and 8.4 times for the respective years [1] - The privatization pricing reflects a revaluation opportunity, maintaining a "buy" rating [1]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company's domestic business is steadily growing, while the privatization process is progressing smoothly [1] - The core profit for the first half of 2025 is reported at 3.22 billion, a year-on-year decrease of 1.2%, primarily due to a decline in overseas LNG sales profits [1] - The privatization pricing reflects a significant value reassessment opportunity, with an implied share price of 80 HKD, indicating a 27% upside from the current closing price [1] Financial Performance Summary - Total revenue for 2023 is projected at 114.18 billion, with a year-on-year growth of 3.46% [1] - The net profit attributable to shareholders for 2023 is estimated at 6.82 billion, reflecting a year-on-year increase of 16.21% [1] - The earnings per share (EPS) for 2023 is expected to be 6.03, with a price-to-earnings (P/E) ratio of 9.58 [1] Business Segment Analysis - Domestic natural gas retail shows a gross profit of 3.092 billion, with a slight year-on-year decrease of 1.5% [1] - The connection business has a gross profit of 820 million, with new residential connections down by 10.7% [1] - The energy business reports a gross profit of 1.09 billion, with installed capacity increasing by 8.5% year-on-year [1] - The smart home business has a gross profit of 1.47 billion, with an increase in average customer spending [1] Privatization Details - The privatization plan involves a total transaction value of 59.924 billion HKD, with a share payment of 41.572 billion HKD and cash payment of 18.352 billion HKD [1] - The transaction is expected to complete with New Hope Holdings becoming the sole owner of the company [1]

Core Insights - The company reported a revenue of 55.673 billion RMB for the six months ending June 30, 2025, representing a year-on-year increase of 1.99% [1] - Shareholder profit decreased by 5.6% to 2.429 billion RMB, with basic earnings per share at 2.19 RMB and an interim dividend of 0.65 HKD per share proposed [1] Group Performance - The company is focused on becoming a service provider based on natural gas, aiming to create multi-value for customers through smart innovation [1] - Natural gas retail volume reached 12.953 billion cubic meters, up 1.9% year-on-year [1] - The gross profit from the diversified energy business grew by 2.1%, while the smart home business gross profit increased by 4.9% [1] - The gross profit margin from diversified energy and smart home businesses rose by 1.4% to 39.6% [1] Customer Development - The company implemented differentiated development strategies to grow its customer base, focusing on cost reduction and stable gas supply for industrial clients [2] - New gas volume for industrial clients increased by 4.682 million cubic meters per day, while commercial clients added 1.604 million cubic meters per day [2] - The company developed 174,000 existing residential customers to counteract the decline in the new housing market, achieving a total of 692,000 residential installations [2] Resource Optimization - The company enhanced its resource structure, with resource volume increasing by 1.3 billion cubic meters year-on-year [3] - The company secured long-term resources from Sinopec, improving resource assurance capabilities [3] - To mitigate procurement foreign exchange risks, the company signed forward foreign exchange contracts, with a hedged amount of 624 million USD and a hedging ratio of 25.6% [3]

Core Viewpoint - New Horizon Energy reported a revenue of 55.673 billion RMB for the six months ending June 30, 2025, reflecting a year-on-year increase of 1.99%, while shareholder profit decreased by 5.6% to 2.429 billion RMB [1] Group 1: Financial Performance - Revenue for the first half of the year was 55.673 billion RMB, up 1.99% year-on-year [1] - Shareholder profit was 2.429 billion RMB, down 5.6% year-on-year, with basic earnings per share at 2.19 RMB [1] - The company proposed an interim dividend of 0.65 HKD per share [1] Group 2: Business Strategy and Growth - The company is focused on becoming a service provider based on natural gas, aiming to create multi-value for customers through smart innovation [1] - Natural gas retail volume reached 12.953 billion cubic meters, a year-on-year increase of 1.9% [1] - The company capitalized on power reform opportunities, achieving a 2.1% year-on-year growth in its diversified energy business gross profit [1] - The gross profit of the smart home business increased by 4.9% [1] Group 3: Customer Development - The company implemented differentiated development strategies to grow its customer base, adding 4.682 million cubic meters per day from industrial clients [2] - For commercial clients, the company added 1.604 million cubic meters per day by optimizing processes and leveraging government policies [2] - The company developed 174,000 existing residential customers to counteract the decline in the new housing market, with a total of 692,000 residential installations [2] Group 4: Resource Optimization and Risk Management - The company enhanced its resource structure, with a 1.3 billion cubic meter increase in resource volume year-on-year [3] - The company secured long-term resources from Sinopec, improving resource assurance capabilities [3] - To mitigate procurement foreign exchange risks, the company signed forward foreign exchange contracts, with a hedged amount of 624 million USD and a hedging ratio of 25.6% [3]

Investment Rating - The report assigns a "Buy" rating to the company, New Energy (2688 HK), with a target price of HKD 74.60, indicating a potential upside of 21.4% from the current price of HKD 61.45 [4][9]. Core Insights - The first quarter of 2025 saw gas sales remain stable, influenced by a warm winter, with retail gas volume showing a year-on-year increase of 0.3%, outperforming the mainland's natural gas apparent consumption decline of 2.2% [2][7]. - The management indicated that the warm winter impacted gas sales by approximately 2-3 percentage points, with residential gas sales increasing by 1.1% year-on-year [2][7]. - The privatization plan is progressing steadily, with expectations to seek shareholder approval in the fourth quarter of this year [7][8]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 113,858 million - 2024: RMB 109,853 million - 2025E: RMB 116,552 million (6.1% YoY growth) - 2026E: RMB 122,701 million - 2027E: RMB 129,239 million [3][11]. - Net profit estimates are: - 2023: RMB 6,816 million - 2024: RMB 5,987 million - 2025E: RMB 7,174 million (3.2% YoY growth) - 2026E: RMB 7,782 million - 2027E: RMB 8,098 million [3][11]. - The company is expected to maintain moderate profit growth over the next three years, with a compound annual growth rate of approximately 5% from 2024 to 2027 [7][8]. Operational Performance - The company’s retail gas sales volume is projected to grow as follows: - 2023: 25,145 million cubic meters - 2024: 26,200 million cubic meters - 2025E: 26,782 million cubic meters (2.2% growth) - 2026E: 27,588 million cubic meters - 2027E: 28,421 million cubic meters [8]. - The company has also seen a 9.9% year-on-year increase in its diversified energy sales volume, reaching 100 billion kWh in the first quarter [7][8]. Market Position - The company’s market capitalization is approximately HKD 68,286.31 million, with a 52-week high of HKD 79.30 and a low of HKD 45.25 [6][9]. - The stock has shown a year-to-date change of 10.03% [6].

Investment Rating - The report assigns a "Buy" rating to the company, New Energy (2688 HK), with a target price of HKD 74.60, indicating a potential upside of 21.4% from the current closing price of HKD 61.45 [4][9]. Core Insights - The first quarter of 2025 saw gas sales remain stable, influenced by a warm winter, with retail gas volume growing by 0.3% year-on-year, outperforming the mainland's natural gas apparent consumption decline of 2.2% [2][7]. - The management indicated that the warm winter impacted gas sales by approximately 2-3 percentage points, with residential gas sales increasing by 1.1% year-on-year [2][7]. - The privatization plan is progressing steadily, with expectations for shareholder approval in the fourth quarter of this year [7][8]. Financial Overview - Revenue projections for the company are as follows: - 2023: RMB 113,858 million - 2024: RMB 109,853 million - 2025E: RMB 116,552 million (6.1% growth) - 2026E: RMB 122,701 million (5.3% growth) - 2027E: RMB 129,239 million (5.3% growth) [3][11]. - Net profit estimates are: - 2023: RMB 6,816 million - 2024: RMB 5,987 million - 2025E: RMB 7,174 million (3.2% growth) - 2026E: RMB 7,782 million (8.5% growth) - 2027E: RMB 8,098 million (4.1% growth) [3][11]. - The company maintains a dividend yield of 4.6% in 2023, projected to increase to 7.0% by 2027 [3][11]. Operational Performance - The company expects retail gas volume and energy sales to grow by 2.2% and 12% respectively in 2025, despite the warm winter's impact [7][8]. - The number of new residential connections decreased by 16% year-on-year to 287,000, with a ratio of new to old homes at 3:1 [7][8]. - The energy business saw a sales volume increase of 9.9% year-on-year to 10 billion kWh, with 14 new projects becoming operational [7][8]. Market Position - The company's market capitalization stands at approximately HKD 68,286.31 million, with a 52-week high of HKD 79.30 and a low of HKD 45.25 [6][9]. - The stock has shown a year-to-date change of 10.03% [6].