Incident: The company announced results for the first quarter of 2024. In 24Q1, 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, up 6.32% year on year; net profit after deducting 462 million yuan, up 2.71% year on year; the company confirmed the employee stock ownership plan's share payment fee of 7.4392 million yuan, calculated financial expenses of 21.7355 million yuan based on actual interest rates.
Gas prices have declined overall, the superiority of the company's integrated “dumbbell” business model has been highlighted, and clean energy has shown good resilience. The company has now formed a “dumbbell” business model with core assets such as ships and receiving stations as the axis, connecting domestic and foreign resources, and terminals. Against the backdrop of an overall decline in natural gas prices, the company can flexibly increase procurement of spot resources, reduce costs, and actively match downstream customers such as industry, industry, gas power plants, etc., to achieve good smooth prices, and the LNG business shows good resilience. On the LPG side, 24Q1 sales volume remained stable year on year, and the net price capacity was stable. In recent years, the company increased its chemical raw gas market development and achieved a breakthrough in the raw gas market in Shandong. In 2023, the Huizhou 50,000 ton liquefied hydrocarbon terminal and LPG supporting storage base project was approved. With the gradual investment of terminal assets, the company is expected to further expand the scale of the LPG business.
The stability of the energy service business continues to be verified, and the broad scope for long-term growth is expected to improve the company's profits.
24Q1's gas recycling and treatment supporting service operations volume is about 100,000 tons, and the service revenue per ton is basically stable; the number of auxiliary discharge operations exceeds 130, achieving further growth from 110 at the end of 2023. According to the company's plan, 2024 will focus on expanding Shenfu and Linxing block operation service projects and promoting pilot operation service projects in Sichuan and Chongqing. The goal is to add 100 low-yield and inefficient well auxiliary discharge projects. The medium- to long-term trend of auxiliary extraction is good. Furthermore, the “New Bauhinia” LPG vessel in the company's fund-raising project was successfully delivered and provided services to the outside world, further enhancing the company's core asset capacity and energy logistics business volume.
The Hainan commercial development project was officially launched, anchoring commercial aerospace to actively expand the special gas business. On April 17, 2024, the company officially started construction of a special combustion special gas supporting project for the Hainan commercial space launch site. The Hainan commercial development project is the country's first commercial space launch site. It is building a “factory launch” model around the Starlight Gigafactory, which has unique international space city supporting advantages, policy support advantages and industrial cluster advantages. Relying on existing BOG helium production capacity and long-term methanol and LNG resource advantages, the company successfully obtained the special fuel gas supporting construction qualification for the project. The total investment amount of the project is estimated at 493 million yuan. The estimated annual output of various gases is 333 tons of liquid hydrogen, 48,000 tons of liquid oxygen, 48,000 tons of liquid nitrogen, 384,000 cubic meters of helium, and 9,400 tons of high-purity liquid methane. We believe that the commercial development project, as a landmark event in the company's specialty gas field, is expected to become an important vehicle for the company to fully enter the aerospace industry chain and help the company expand its special gas needs other than rocket launches.
Investment advice and valuation: The company's revenue for 2024-2026 is estimated to be RMB 29.443 billion, RMB 31.632 billion and RMB 33.02 billion, respectively, with growth rates of 10.8%, 7.4% and 4.3% respectively, and net profit to mother of 1,508 billion yuan, RMB 1,764 billion and RMB 2,027 billion respectively, with growth rates of 15.5%, 17% and 14.9% respectively. Corresponding PE is 11X, 10X, and 8X, respectively. Maintain a “buy” investment rating.
Risk warning: risk of global economic fluctuations, risk of upstream procurement and price fluctuations, risk of exchange rate fluctuations, risk of project progress falling short of expectations, risk of policy progress falling short of expectations.