Jingwu Financial News | htsc issued a research report indicating that considering the changes in new customers and gas demand, enn energy (02688) has slightly adjusted its core profit for 2024-2026 down by 2.5%/3.1%/2.1% to 6.68/7.43/8.23 billion yuan. Retail gas volume is expected to grow moderately, with a growth rate of +4.8%/+5.7%/+5.0% for 2024-2026; pricing and cost reduction are expected to continuously improve the price difference, projected at 0.54/0.55/0.56 yuan/cubic meter for 2024-2026. The general energy sales maintain high growth, and the smart home business has ample market space. The company's target dividend payout ratio for 2024 is 44% (year-on-year +4pp), corresponding to a dividend yield of 5.2%. The bank expects that the company's free cash flow and dividend payout ratio will likely trend upwards for 2024-2026.

Considering the changes in new customers and gas demand, the bank has lowered the core profit for 2024-2026 by 2.5%/3.1%/2.1% to 6.68/7.43/8.23 billion yuan. The bank has adjusted the target price to 71.1 HKD, based on a 10x 2025E PE and the HKD to RMB intermediate exchange rate of 0.92 (previously: 72 HKD, based on an 11x 2024E PE), with the target PE equal to the 3-year dynamic PE average. The rating remains "buy."