Incidents:
Company Announces FY2023/24 Interim Results:
The company's total revenue for the period was HK$36.049 billion, a year-on-year decrease of 16.1%, and achieved gross profit of HK$5.724 billion, a year-on-year decrease of 17.9%, profit attributable to shareholders of HK$1.83 billion, a year-on-year decrease of 43.9%, and basic profit per share of HK$34.00 cents, a year-on-year decrease of 43.3%.
The company's net operating cash flow during the period increased sharply by 59.7% to HK$7.57 billion compared to HK$4.74 billion in the same period last year. Free cash flow increased sharply by 491.6% from HK$840 million in the same period last year to HK$4.97 billion. The company paid back shareholders through cash dividends, and the medium-term dividend increased sharply by 50% to HK15 cents.
Comments and opinions:
Total gas sales during the period increased 1.7% year on year, and new home connections decreased by 31.2% year on year:
The decline in the company's performance was due to multiple comprehensive factors, including weak gas sales growth, deep adjustments in the real estate market that continued to affect the new housing connection business, the increase in US dollar interest rates, increased financial expenses, and exchange losses. The company's total natural gas sales during the period increased 1.7% to 16.97 billion cubic meters; the number of newly connected residential users dropped sharply by 31.2% to 1.052 million households, affecting the overall performance of revenue and profit.
The price adjustment and price adjustment mechanism was launched, which is beneficial to the correction of gross differences:
The company's gross margin rose to 0.57 yuan/cubic meter during the period. As of November 26, a total of 11 provinces/autonomous regions/municipalities have established linkage mechanisms. As policies in various regions will continue to be implemented, the provincial linkage mechanism requires each local/district/county to complete the establishment of a mechanism within a limited period of time. It is expected that 90% of cities will complete the fair price by the end of 2024. As of November 26, 2023, the company has received fair pricing documents for a total of 162 projects, accounting for nearly half of the population volume. Among them, Hebei and Inner Mongolia have achieved global price adjustments to help fix residents' gross shortfalls.
The volume of gas in upstream insurance and supply contracts has increased significantly, and the gross margin of “gas instead of coal” residents in North China has increased:
The company's contracted gas volume for the entire fiscal year accounted for about 98%, and the contracted gas volume increased by no less than 5% from last year. At the same time, for gas to coal projects in North China, the Hebei provincial government provided financial subsidies based on the difference between “comprehensive procurement cost+gas distribution price - sales price”. It is estimated that the gross margin for gas to coal in Hebei will rise to 0.60 yuan/m3 this winter.