Key points of investment

Incident: The company released its 2024 three-quarter report. The first three quarters of 2024 achieved revenue of 17.048 billion yuan, a decrease of 12.75%; net profit to mother was 1.535 billion yuan, an increase of 35.69%; net profit after deducting non-attributable net profit of 1.208 billion yuan, an increase of 2.23%; and the weighted average ROE increased 2.65 pcts year over year to 18.08%.

24Q1-3 returned +36% & deducted +2%, and the results were steady in the third quarter of the single quarter. In the first three quarters of 2024, the company achieved revenue of 17.048 billion yuan, a decrease of 12.75%; net profit to mother was 1.535 billion yuan, an increase of 35.69%; net profit after deducting non-return to mother was 1.208 billion yuan, an increase of 2.23%. In the third quarter of 2024, the company achieved net profit/deducted non-return to mother of 0.429/0.42 billion yuan, +2.43%/+3.06% year-on-year. The company's clean energy purchases from abroad are settled in US dollars, and it will maintain a certain amount of net exposure to the US dollar.

The exchange loss due to net exposure in US dollars for the first three quarters/third quarter of 2024 was $21.36/54.57 million. Excluding exchange effects, the company returned 1.556/1.23 billion yuan from mother in the first three quarters, +44.35%/+8.92% year-on-year, and 0.483/0.475 billion yuan from mother/withheld from mother in the third quarter, +21.17%/+22.35% over the same period.

Clean energy has maintained development resilience, and gross profit per ton of LNG has recovered compared to 24H1. In the first half of 2024, the company 1) LNG: gross profit of LNG tons recovered significantly compared to the first half of the year. Domestic sales achieved rapid year-on-year growth. Industrial terminals, transportation fuels, and gas power plants became the main driving forces for demand growth, and spot trade sales declined year-on-year. 2) LPG: Sales remained basically stable year over year.

Capabilities and special abilities continue to grow. 1) Energy services: In the third quarter of 2024, the company's natural gas recycling and processing supporting service volume exceeded 0.11 million tons, with a steady year-on-year increase, and service revenue per ton remained stable under price linkage. In addition, the company actively carried out terminal infrastructure window services and ship external capacity services to promote rapid growth in energy logistics service performance. 2) Special gases:

In the third quarter of 2024, the company's high-purity helium (production) sales volume was about 0.11 million square meters, increasing steadily over the previous year, while actively expanding the terminal retail market and speeding up the implementation of the “resource+terminal” model. In addition, the company's hydrogen project had an operating capacity of 0.02 million square meters per hour, and hydrogen production and sales reached 17.68 million square meters during the reporting period, which was a steady increase over the previous year.

The financial situation is good, and the value of fixed+special cash dividends is outstanding. In the first three quarters of 2024, the company's 1) net cash flow from operating activities was 0.819 billion yuan, a year-on-year decrease of 40.87%; 2) net cash flow from investing activities -1.233 billion yuan, up 35.19% year on year; 3) net cash flow from financing activities was -0.674 billion yuan, a year-on-year decrease of 144.92%. The decline in cash flow from operating activities was mainly due to interperiod receipts and payments. The company's balance ratio for the first three quarters of 2024 was 35.19%, down 12.01 pct year on year, down 8.21 pct from the beginning of the year. Good cash flow and low balance ratio. The company plans to pay a fixed cash dividend of 0.75/0.85/1 billion yuan in 2024-2026. When the net profit returned to the mother increased by more than 18% in that year, it will launch an annual special cash dividend with a lower limit of 0.02 billion yuan, showing the value of cash.

Profit forecast and investment rating: Considering 2024H1's fixed asset disposal income due to ship capacity optimization, we raised 2024 net profit from 1.52 billion yuan to 1.71 billion yuan, maintaining the 2025-2026 net profit of 1.74/2.04 billion yuan, corresponding to 2024-2026 PE10.3/10.1/8.6x (2024/10/23), maintaining the “buy” rating.

Risk warning: gas prices fluctuate sharply, natural gas demand falls short of expectations, and project commissioning falls short of expectations