Incident Inc. publishes its 2023 annual report. During the reporting period, the company achieved operating income of 3011.01 billion yuan, down 7.0% year on year; net profit to mother was 161.14 billion yuan, up 8.3% year on year; net profit after deducting non-return to mother was 187.13 billion yuan, up 9.9% year on year. Among them, in the fourth quarter, the company achieved operating income of 728.88 billion yuan, down 7.0% year on year and 9.1% month on month; net profit to mother of 29.49 billion yuan, up 1.3% year on year and 36.4% month on month; net profit after deducting non-return to mother was 52.57 billion yuan, up 27.3% year on year and 11.4% month on month.
Various businesses operated smoothly and efficiently, and operating performance reached a record high. During the reporting period, the company's two major oil and gas industry chains and various businesses operated smoothly and efficiently. The oil and gas and new energy, refining, chemical and new materials, sales and natural gas sales businesses achieved operating profits of 1487.0, 369.4, 239.6, and 43.04 billion yuan respectively, with year-on-year changes of -10.3%, -9.0%, 66.7% and 232.2%. In terms of oil and gas resources, in 2023, the company actively promoted increased production and efficiency, and strengthened stable production in old oil and gas fields and efficient production in new regions. Crude oil and saleable natural gas production were 937.1 million barrels and 4932.4 billion cubic feet respectively, up 3.4% and 5.5% year on year, respectively; the company achieved a price of 76.60 US dollars/barrel, a decrease of 16.8% year on year, which is the main reason for the decline in operating profit in the oil and gas sector. In terms of downstream refining and chemistry, the company seized the favorable opportunity for domestic demand to resume growth and focus on increasing the sales volume and market share of refined oil products. The annual crude oil processing volume, refined oil production and sales volume were 1398.8 million barrels, 122.76 million tons, and 165.798 million tons, respectively, up 15.3%, 16.5% and 10.1% year on year; the company increased research and development of new chemical materials to continue to grow. As sales increased and raw material prices declined, the company's chemical business turned a year-on-year loss into profit in 2023.
Continuously optimize the investment structure, help the company to steadily develop its core business, adhere to the concept of strict investment, accurate investment, and efficient investment, and continuously optimize the investment structure. In 2024, the company plans to spend 258 billion yuan in capital expenditure. By sector, it will mainly be used in the oil and gas and new energy sectors, as well as the refining, chemical and new materials sectors.
Among them, the planned capital expenditure for the oil and gas sector is 213 billion yuan. The company will mainly focus on large-scale exploration and development in key domestic basins, promote independent overseas exploration projects, and increase efforts to obtain high-quality overseas projects; the refining, chemical and new materials sector plans to spend 29 billion yuan on capital expenditure, which will mainly be used for transformation and upgrading projects of various subsidiary companies. In addition, sales, gas sales, headquarters, and other planned capital expenses for 2024 were $7 billion, $6 billion, and $3 billion, respectively.
Actively safeguard shareholders' interests and firmly implement the high dividend policy. Since its listing, the company has always attached great importance to shareholder returns, strictly complied with the “Articles of Association” and related regulatory requirements, and actively distributed dividends. The company now pays cash dividends twice a year. The mid-term and final dividends of 2023 are 0.21 and 0.23 yuan/share (tax included), respectively. The total amount of the company's cash dividends for the whole year is 80.53 billion yuan (tax included), an increase of 4.1% over the previous year, and the dividend ratio is 50.0%. With the expectation that the company will maintain steady operation, the company's stable and active dividend policy and high dividend rate are expected to continue in the future. The company's shareholders are expected to fully benefit, and the company's medium- to long-term investment value will be highlighted.
The investment proposal estimates that the company's revenue for 2024-2026 was 29464.34, 29472.24, and 2959.166 billion yuan, respectively; net profit to mother was 1673.98, 1771.14, and 179.249 billion yuan, respectively; EPS was 0.91, 0.97, and 0.98 yuan/share, respectively. Maintain a “Recommended” rating.
Risks indicate the risk of large fluctuations in international oil and gas prices, the risk of market demand recovery falling short of expectations, and the risk of declining product sentiment.