Event: On April 22, 2024, the company released its report for the first quarter of 2024. In 2024, the company achieved operating income of 6.333 billion yuan, a year-on-year decrease of 2.17%; realized net profit of 480 million yuan, an increase of 6.32% over the previous year; realized net profit of 462 million yuan without return to mother, an increase of 2.71% over the previous year.
The clean energy business is growing steadily and profitable and resilient. In 24Q1, domestic and foreign natural gas prices fell sharply. China's LNG ex-factory price index was 4,652 yuan/ton, down 24.60% year on year; the average CIF price of Chinese LNG imports was 9.30 US dollars/million British heat (equivalent to 3,220 yuan/ton, the exchange rate was 7.1028 for the median price of US dollar to RMB for the quarter, 1 million British thermal energy = 48.76 tons), down 43.15% year on year.
Against this backdrop of a sharp drop in natural gas prices, the company leveraged the advantages of an integrated “dumbbell” business model, increased the procurement of spot resources, actively matched downstream users such as industry, gas power plants, and major customers, and strengthened its business affordability. Over the same period, the company's LPG sales also remained basically stable year on year. In terms of gross margin, the company's 24Q1 comprehensive gross margin was 9.49%, a year-on-year decline of only 0.72 pct, showing the stability of the main business profitability. In 2024, the company aims to increase domestic terminal sales by more than 15% by 2024 through a combination of measures such as direct terminal supply for major customers, franchising for park customers, and resource matching for gas power plants.
Energy services have entered the fast track of development. 1) Recycling: 24Q1, the company's gas recycling and treatment support service volume is about 100,000 tons, and the service revenue per ton is basically stable; 2) Auxiliary discharge: The company thoroughly explores a business development model that can be quickly replicated. By the end of 24Q1, the company was operating more than 130 low-yield and inefficient well projects. Compared with the number of wellheads at the end of 23, the company aims to add 100 low-yield and low-efficiency well auxiliary extraction projects throughout the year 2024, focusing on expanding operation service projects in the Shenfu and Linxing blocks, while actively promoting operation service projects in the Sichuan and Chongqing regions Pilot; 3) Energy logistics: During the 24Q1 period, the LPG ship “New Bauhinia”, the company's IPO fundraising project, was successfully delivered and provided external capacity services. The ship is a very large gas carrier with a capacity of 93,000 cubic meters, and the total investment of the company is about 567 million yuan; in addition, LNG's external window service will further promote rapid growth in the revenue and profit level of the energy logistics service business.
Helium production has increased rapidly, and the layout of “on-site gas+retail gas stations” is speeding up. In 24Q1, the company produced and sold more than 60,000 square meters of high-purity helium, an increase of more than 20% over the previous year. At the same time, the company actively expanded the terminal retail market for helium and hydrogen. On the one hand, the company plans to expand domestic helium production capacity to 500,000 square meters in the future. At the same time, it is cooperating with CNPC to build a helium lift project in Luzhou, Sichuan to help CNPC solve the national helium gas problem; on the other hand, the company actively promotes the continuous implementation of aviation, aerospace and satellite industry chain gas projects and accelerates the construction of the Hunan Elshi Phase II project (mainly including hydrogen filling workshops, inert gas filling plants, Class A warehouses, Class C workshops, etc.) to actively promote the signing and construction of retail gas station projects in East China, and actively reserve and service the hydrogen production industry New on-site gas generation project for chemical users.
It is proposed to repurchase 1 to 150 million yuan, and the repurchase price will not exceed 41.6 yuan/share, demonstrating the company's confidence in development. On April 22, the company launched its fourth share repurchase plan after listing. In the first three, the company repurchased 1.51, 1.50, and 100 million yuan within 3 months, 2 months, respectively. This time, the company plans to repurchase 240.38 to 3.6058 million shares at a repurchase price of no more than 41.60 yuan/share, with a total repurchase capital of not less than 100 million yuan or no more than 150 million yuan. All of the repurchased shares will be used to later implement the employee stock ownership plan or share incentive plan. The implementation period of the repurchase plan is from April 22, 2024 to April 22, 2024 April 21, 2025. Based on the closing price of April 22, 2024, the maximum premium rate of the company's repurchase price was 54.93%, demonstrating the company's strong confidence in future development.
Investment advice: The company's three main businesses are developing rapidly, with significant synergy advantages, and increasing competitive barriers. We expect the company's net profit to be 15.20/17.33/2.003 billion yuan respectively in 2024-2026, corresponding EPS of 2.40/2.74/3.16 yuan/share, respectively, and the PE corresponding to the stock price on April 22, 2024 is 11/10/8 times, respectively, maintaining the “recommended” rating.
Risk warning: LNG demand falls short of expectations, and project commissioning progress falls short of expectations.