Glonghui, January 8 | Daiwa published a report stating that it will upgrade the investment rating of Xinao Energy from “hold” to “outperform the market” and raise the target price from HK$60 to HK$63. Despite cutting its earnings estimates per share by 5 to 7% from 2024 to 2025, Xinao Energy is confident that it will achieve its target of a core profit increase of about 10% in the medium to long term, and capital expenditure growth is limited. The current price of the company is equivalent to 8.4 times the projected price-earnings ratio for this year, and the dividend ratio is 5%, which is an attractive valuation. Yamato said that under the re-appointed leadership of Wang Dongzhi, Xinao Energy aims to increase gas sales by at least 5% year-on-year, with a gross profit of 0.5 yuan per cubic meter. The transfer of gas costs to residents in Zhejiang and Hunan has also supported the recovery of gross profit from unit natural gas sales. Based on management guidance, Daiwa expects Xinao Energy's core profit to be reduced by 5% this year, but management ensures that its dividend per share remains at the level of 2022 to 2023.