The company released its 2024 quarterly report. In Q1 2024, the company achieved revenue of 34.231 billion yuan, -0.4% year-on-year, and achieved core profit of 1,082 billion yuan, or -12.8% year-on-year. (Core profit is net profit attributable to mother net income after deducting exchange gains and losses, fair value changes, impairment losses, amortization of stock incentive costs, and net income from disposal of non-current assets)

Implement the national dual carbon policy and actively promote the natural gas business to continue to grow on a large scale. 2024Q1, the company's total gas sales volume reached 10.04 billion cubic meters, +5.5% year-on-year. Among them, the platform traded gas was 1,213 billion cubic meters, +33.60% year over year; retail gas volume was 7.237 billion cubic meters, +2.70% year over year.

The retail gas business is gradually recovering. 2024Q1, there has been an increase in industrial and commercial energy and people's livelihood in the company's retail gas business. Among them, industrial and commercial gas achieved sales of 5.224 billion square meters, +2.90% year-on-year, adding 2,929,000 cubic meters of industrial and commercial users; Minsheng gas achieved sales of 1.947 billion square meters, +2.50% year-on-year, adding 333,000 new households.

Innovate business models and take more measures to expand the scale of the platform's trading gas business. 2024Q1, the company achieved sales of 833 million square meters of domestic gas, +95.5% over the same period last year. Domestic customers are mainly urban gas and energy groups and large industrial customers. International trade gas achieved sales of 380 million square meters, -21.2% year-on-year.

Continue to stabilize cash dividends and enhance shareholder returns. On December 9, 2023, the company disclosed the “Special Shareholder Dividend Plan for the Next Three Years (2023-2025)”: cash dividends of 0.25 yuan (tax included), 0.22 yuan (tax included), and 0.18 yuan (tax included) per share from 2023 to 2025. The company plans to achieve a cash dividend ratio of 40% of the core profit attributable to shareholders of listed companies in 2030. In 2023, the company expects to pay a cash dividend of 2,814 billion yuan, accounting for 39.68% of the company's net profit attributable to shareholders of listed companies in 2023.

Profit forecasting and investment ratings. We estimate that the company's profit from 2024 to 2026 will be 7.5 billion yuan, 8.5 billion yuan, and 8.8 billion yuan, respectively, and EPS will be 2.42 yuan, 2.75 yuan, and 2.83 yuan respectively. Referring to the valuation level of comparable companies, they were given 11-13 times PE in 2024, with a corresponding reasonable value range of 26.62-3 1.46 yuan, maintaining an investment rating of “superior to the market”.

Risk warning. The construction of the project fell short of expectations; product prices fluctuated greatly; and the exchange rate fluctuated greatly.