Matters:
Company announcements:
The company formulated the “Cash Dividend Plan for the Next Three Years (2024-2026)” and plans 2024-2026. The company's annual cash dividend amount will be 7.50/8.50/1,000 billion yuan, respectively. At the same time, a special cash dividend plan is formulated. When the company's performance meets the assessment requirements, a special dividend plan for the current year will be launched, and the minimum cash dividend amount is 0.2 billion yuan.
The company formulated the second phase of the employee shareholding plan. The capital size was no more than 98.775 million yuan. After the funds were in place, all were used to purchase the company's shares, totaling no more than 7.5 million shares, accounting for 1.18% of the company's total share capital. The transfer price of the shareholding plan was 13.17 yuan/share, and the shareholding period was 48 months, and the shareholding period was not less than 12 months.
Key events:
On June 6, launch station 2 at the Hainan Commercial Space Launch Site in Wenchang was completed. It is the first liquid general-purpose launch station in China. Previously, launch station 1 was completed in December 2023. At present, the gas supply system at the Hainan commercial space launch site has completed equipment commissioning, has the conditions to use special combustion gas, and has moved into the CZ-8A and CZ-12 launch full system joint training stage according to the annual launch plan. It is expected that normalized launches will be achieved in the second half of the year.
Guoxin Public Environmental Protection Views:
1) The company invests in the construction of a special combustion special gas project at the Hainan commercial space launch site, anchoring commercial space to take advantage of the growth attributes of the special gas business, which is expected to increase the company's profits and grow further as China's commercial aerospace scale expands; 2) The company's clean energy business has demonstrated its affordability, and the LNG and LPG businesses maintain a relatively stable gross margin on the basis of steady growth in production and sales. Taking into account factors such as the increase in the company's dividend ratio and changes in domestic and foreign gas prices, the profit forecast is estimated to be 15.5/17.8/2.03 billion yuan in 2024-2026 (originally 15.4/18.2/2.0 billion yuan), with a year-on-year growth rate of 18% /15/15%, corresponding to the current stock price PE of 12.2/10.6/9.3X, maintaining the “superior to the market” rating.
Commentary:
Formulate a fixed dividend plan with high dividend potential
The company formulated the “Cash Dividend Plan for the Next Three Years (2024-2026)”, which plans that 2024-2026, the company's annual cash dividend amount will be 7.50/8.50/1,000 billion yuan, respectively. The fixed cash dividends will be paid 2 times for each year, respectively. In principle, the first half year and annual cash dividends will account for 30% to 40% and 60% to 70% of the fixed cash dividends for that year, respectively. When the board of directors of the company believes that there is a deviation between the stock price in the secondary market and the real value of the company, it will take the opportunity to launch a share repurchase plan to maintain the company's market value, and cancel the repurchased shares and reduce the company's registered capital. The actual amount of the repurchased shares will be included in the fixed cash dividend amount for the year.
At the same time, the company formulated a special cash dividend plan, based on net profit of 1,306 million yuan in 2023. For three consecutive years in 2024-2026, the net profit to the mother achieved by the company continued to grow, and when the net profit realized in that year increased by more than 18% year-on-year compared to the previous year, the company will launch a special dividend plan for the current year, and the lower limit of the cash dividend amount is 0.2 billion yuan.
The company has sufficient cash flow, which supports an increase in the dividend ratio. In 2023, the company achieved net operating cash flow of RMB 2,158 billion, an increase of 27.2% over the previous year, and net cash and cash equivalents increased by RMB 1,025 million, achieving net growth for three consecutive years. As of the first quarter of 2024, the company had cash and cash equivalents of 5.241 billion yuan, monetary capital of 5.406 billion yuan, and a balance ratio of 41.42% to ensure the company's ability to pay dividends.
According to the company's dividend plan and the company's stock price as of June 7, 2024, the company's dividend rate for 2024-2026 was not less than 3.9%/4.4%/5.2%. Since its listing, the company has actively rewarded investors. The dividend amount CAGR for 2021-2026 reached 39.4%, and the dividend rate increased year by year.
Launch the second phase of equity incentives to demonstrate confidence in development
The company formulated the second phase of the employee shareholding plan. The capital size was no more than 98.775 million yuan. After the funds were in place, all were used to purchase the company's shares, totaling no more than 7.5 million shares, accounting for 1.18% of the company's total share capital. The transfer price of the shareholding plan was 13.17 yuan/share, and the shareholding period was 48 months, and the shareholding period was not less than 12 months.
Combined with the company's first-phase employee stock ownership plan, the 2024-2027 company performance assessment index is net profit to mother not less than 15/17.25/19.84/2.281 billion yuan, corresponding to an annual growth rate of 15%, which is similar to the special dividend performance assessment index, and also shows confidence in the company's development.
Anchored commercial aerospace, the special gas business entered a growth trajectory
On June 6, launch station 2 at the Hainan Commercial Space Launch Site in Wenchang was completed. It is the first liquid general-purpose launch station in China. Previously, launch station 1 was completed in December 2023. At present, the gas supply system at the Hainan commercial space launch site has completed equipment commissioning, has the conditions to use special combustion gas, and has moved into the CZ-8A and CZ-12 launch full system joint training stage according to the annual launch plan. It is expected that normalized launches will be achieved in the second half of the year.
On April 17, the Hainan commercial space launch site special combustion special gas supporting project was officially started, with a total investment of 493 million yuan, including a 9400 tons/year liquid methane purification unit, a 333 tons/year liquid oxygen and 48,000 tons/year liquid nitrogen air separation preparation device, a 384,000 square meter/year helium storage and liquid helium gasification device, and a 7114 tons/year space kerosene storage device and supporting public engineering and auxiliary facilities.
The 2024 “Report on the Work of the Government” proposes to vigorously promote the construction of a modern industrial system, accelerate the development of new quality productivity, actively cultivate emerging and future industries, and actively build new growth engines such as biomantry, commercial aerospace, and the low-altitude economy. As one of the new types of productivity, commercial space is expected to usher in a period of rapid growth. Liquid methane, helium, etc. are all special fuel gases needed for commercial space. As an important natural gas supplier in China and the target of scarce helium gas resources, the company anchors the special gas business in commercial aerospace, and is expected to grow at the same time as commercial aerospace.
Investment advice: Maintain profit forecasts and maintain a “superior to the market” rating 1) The company invests in the construction of the Hainan commercial space launch site special combustion special gas project, which is expected to increase the company's profits and grow further as the scale of commercial space in China expands; 2) The company's clean energy business has demonstrated its cost-efficiency, and the LNG and LPG businesses maintain a relatively stable gross margin on the basis of steady growth in production and sales. Taking into account factors such as the increase in the company's dividend ratio and changes in domestic and foreign gas prices, the profit forecast is estimated to be 15.5/17.8/2.03 billion yuan in 2024-2026 (originally 15.4/18.2/2.0 billion yuan), with a year-on-year growth rate of 18% /15/15%, corresponding to the current stock price PE of 12.2/10.6/9.3X, maintaining the “superior to the market” rating.
Risk warning
Gas prices fluctuated, downstream demand weakened, and project progress fell short of expectations.