Jinwu Financial News | According to Huatai Securities Research Report, most of Kunlun Energy (00135) gas stations have completed business model adjustments, and the bank is expected to affect the company's retail gas volume growth rate in the short term; however, the company benefits from the gas source advantage of market development and the trend of high-energy industries shifting to the Midwest, and the medium- to long-term retail gas growth rate is expected to lead its peers; the bank adjusted the retail gas growth rate in 2024-26 to +9.4%/+8.3% (previous value +10.3/+10.0/ +9.6%). The bank expects the retail price spread to fall back to 0.46 yuan/square meter in 2024-26, taking into account the decline in the share of sales at gas stations with high price differences and the relative stability of industrial and commercial price spreads. Taking into account the increase in the company's retail gas volume and the increase in gas station leasing and wholesale profit contributions, the bank expects the company's 2024-26 pre-tax profit yoy of +8.3%/+18.0%/+14.7% in the natural gas sales sector.

Considering the short-term impact of gas station business adjustments and the company's natural gas sales growth rate is expected to remain industry-leading, the bank adjusted Kunlun Energy's 2024-26 net profit forecast of -2%/+4%/+7% to 6.19/6.95/7.68 billion yuan, respectively. Structural factors led to a slight slowdown in retail gas volume, which did not hinder the continued growth of natural gas sales profits. The load rate of LNG terminals remains high, and LNG plants have crossed the break-even point.

The bank continued that the company's dividend plan is clear. The bank expects the dividend ratio to reach 43%/45% in 24/25, and the current dividend rate is 4.1%/4.9%. The target price is HK$10.32 (previous value: HK$9.63, based on 12x2024EPE), based on 12x2025EPE and the median price of HKD/RMB 0.925. The bank is optimistic about the company's long-term revaluation and maintains a “buy” rating.