The Zhitong Finance App learned that BOC International released a research report saying that maintaining the Kunlun Energy (00135) “buy” rating and believes that the company's stable profit structure and good cash flow are still a good choice in the industry. Driven by the current natural gas sales sector, the overall net profit can maintain a compound growth of about 10% from 2023 to 2026, and the target price will be raised to HK$8.52.

According to the report, Kunlun Energy's core profit in 2023 fell slightly by 2% year on year to 6.14 billion yuan (same below), lower than the forecast, mainly due to upstream extraction/natural gas sales performance falling short of expectations. The company increased its final dividend of 2023 by 12% year on year, and the annual dividend ratio was 40%. At the same time, it was announced that the target payout ratio for 2025 will be raised to 45%. Management expects retail gas to maintain a year-on-year increase of about 10% in 2024, with industrial gas maintaining a 15% year-on-year increase, mainly due to new projects added last year. At the same time, the bank expects that the company's profit after tax in the LNG processing sector will still have room to grow.