The company released its report for the first half of 2024. In the first half of 2024, the company achieved total operating income of 66.976 billion yuan, a year-on-year decrease of 0.29%; core profit attributable to shareholders of listed companies was 2.699 billion yuan, a year-on-year decrease of 14.83%.

Natural gas sales business: The sales volume of gas traded on the platform increased year-on-year. In the first half of 2024, the company's total gas sales volume reached 19.115 billion square meters, an increase of 5.8% over the previous year. In terms of gas trading gas business, in the first half of 2024, gas traded on the platform reached 2.705 billion square meters, an increase of 21% over the previous year. Among them, gas sales volume on overseas platforms reached 0.964 billion square meters, and gas sales volume on domestic platforms reached 1.741 billion square meters.

In terms of natural gas retail and wholesale business, in the first half of 2024, the retail volume of natural gas reached 12.71 billion square meters, an increase of 4.5% over the previous year. Among them, the gas volume of industrial and commercial users reached 9.561 billion square meters, an increase of 5.4% over the previous year, accounting for 75.2% of the retail gas volume of natural gas; the retail gas volume of residential users reached 3.001 billion square meters, an increase of 3.1% over the previous year, accounting for 23.6% of the retail gas volume of natural gas. In the first half of 2024, the company's wholesale gas sales volume reached 3.7 billion square meters.

Infrastructure operation business: The third phase of the receiving station project is progressing smoothly. The Zhoushan receiving station currently has an actual processing capacity of 7.5 million tons/year, and the supporting undersea pipeline distribution capacity is 8 billion square meters/year. Construction of the third phase of the project began in October 2022. Up to now, all four LNG storage tank outer tank main structures have been completed, and the storage tank project has fully entered the inner tank installation and construction stage. The overall third phase of construction is expected to be put into operation in the fourth quarter of 2025, and the actual processing capacity can exceed 10 million tons/year after commissioning.

Engineering construction and installation business: The coke oven gas project is progressing smoothly. In terms of engineering construction business, the company's Hebei Xinpennan project has successfully released LNG, marking that the company's largest coke oven gas methanation EPC general contract project has officially entered the trial operation stage. In terms of engineering installation business, in the first half of 2024, the company developed 9544 new industrial and commercial users, with an opening gas volume of 7.262 million square meters/day, reaching a total of 0.25 million businesses. Affected by factors such as real estate policy regulation and the downturn in the domestic economy, the project installation progress in the company area has slowed down. 2024H1 has completed a total of 0.775 million household installations, and has developed a total of 30.537 million household users. The average pipeline gas gasification rate is 65.5%, covering a population of nearly 0.14 billion.

Pan-Energy business: Pan-Energy's sales volume increased year-on-year. In the first half of 2024, in terms of project development, the company signed 412 pan-energy micro-grid projects, 4 low-carbon parks, 90 low-carbon buildings, and 201 low-carbon factories. In terms of delivery and operation, the company has 36 pan-energy projects completed and put into operation. A total of 332 pan-energy projects have been put into operation, and 72 pan-energy projects are under construction, and the annual energy supply scale of the projects under construction and operation has reached 57.4 billion kilowatt-hours. With 2024H1, the company achieved Pan-Energy sales volume of 19.74 billion kilowatt-hours, an increase of 26% over the previous year.

Profit forecasting and investment ratings. We expect the company's net profit from 2024 to 2026 to be 6.2 billion yuan, 8.5 billion yuan, and 8.7 billion yuan, respectively, and EPS of 1.99 yuan, 2.75 yuan, and 2.82 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 21.89-25.87 yuan, maintaining a “superior to the market” investment rating.

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

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