TOWNGAS SMART ENERGY(1083.HK):DECENT CHINA GAS DISTRIBUTOR AT DEPRESSED VALUATION
TOWNGAS SMART ENERGY(1083.HK):DECENT CHINA GAS DISTRIBUTOR AT DEPRESSED VALUATION
For the gas distribution business, its total gas sales volume grew 6% YoY (or 4% YoY for retail gas). Dollar margin improved from RMB0.50/m3 in 1H23 to RMB0.52/m3 in 1H24 (or from RMB0.54/m3 to RMB0.56/m3 for retail gas). Progress in increasing end-user residential gas price and increase in self- managed gas supply helped to lift margin. While the operating profit of gas sales slipped 5% YoY, the profit actually grew 6% YoY after including profits from JVs and associates.The company's core earnings surged 57% YoY to HK$707m in 1H24, beating our forecast by 5%. The outstanding growth of its renewable business and lower finance cost were the key growth drivers. We expect its earnings to grow 36% HoH in 2H24 on further improvement in dollar margin and higher contribution from its renewable business. We trim our EPS forecasts by 7-10% for 2025-26 as the company intends to further slow down the investment in its renewable business. However, this will help to improve its near-term free cashflow. Hence, we reiterate our BUY call with target price increased to HK$4.41.
該公司核心收益在1H24年同比增長了57%，達到7,070,000港元，超出了我們的預測5%。可再生能源業務的突出增長和較低的融資成本是主要增長動力。我們預計在2H24年，隨着美元毛利的進一步提高和可再生能源業務的貢獻的增加，其收益將同比增長36%。我們將2025-2026年的每股收益預測下調7-10%，因爲該公司打算進一步減緩對可再生能源業務的投資。然而，這將有助於改善其近期的自由現金流。因此，我們重申買入建議，並將目標價上調至4.41港元。
Key Factors for Rating
評級的關鍵因素
The strong growth in core earnings was mainly driven by the 18x YoY jump in operating profit of its renewable business to HK$164m in 1H24. Its PV power generation jumped 1.43x YoY to 0.68bn kWh as its grid-connected PV generation capacity increased from 1.1GW by the end of 1H23 to 2.1GW by the end of 1H24. On top of the PV power generation, the earnings from asset light operations like energy and carbon management services jumped 3x YoY to RMB28m. This will be another growth driver for the renewable business.
核心收益強勁增長主要受可再生能源業務營業利潤18倍同比增長至1H24年的1,6400萬港元的推動。由於該公司的併網光伏發電裝機容量從1H23年底的1.1GW增加到1H24年底的2.1GW，其光伏發電量同比增加了1.43倍，達到6.8億千瓦時。除了光伏發電之外，像能源和碳管理服務這樣的輕資產運營的收益同比增長了3倍，達到2,800萬元人民幣。這將成爲可再生能源業務的另一個增長動力。
For the gas distribution business, its total gas sales volume grew 6% YoY (or 4% YoY for retail gas). Dollar margin improved from RMB0.50/m3 in 1H23 to RMB0.52/m3 in 1H24 (or from RMB0.54/m3 to RMB0.56/m3 for retail gas). Progress in increasing end-user residential gas price and increase in self- managed gas supply helped to lift margin. While the operating profit of gas sales slipped 5% YoY, the profit actually grew 6% YoY after including profits from JVs and associates.
對於燃氣銷售業務，其總燃氣銷售量同比增長6%(或零售燃氣同比增長4%)。美元毛利率從1H23年的人民幣0.50/m3提高到1H24年的人民幣0.52/m3(或零售燃氣從人民幣0.54/m3上升到人民幣0.56/m3)。居民燃氣最終用戶價格提升以及自主管理燃氣供應的進展有助於提高毛利率。儘管燃氣銷售的營業利潤同比下降5%，但實際利潤同比增長6%，包括與聯營公司和合營公司的利潤。
We expect the company's earnings to grow 36% HoH in 2H24. The dollar margin of retail gas in 2H24 should improve to RMB0.58/m3 based on its full- year guidance. In addition, the volume of PV power generation is targeted to increase 43% HoH.
我們預計該公司的收益將在2H24年同比增長36%。根據其全年預測，零售燃氣的美元毛利率在2H24年將提高至人民幣0.58/m3。此外，光伏發電量的目標爲同比增長43%。
The company is trading at 6.1x 2024E P/E, the lowest among its peers. We think it is unreasonable as it is likely to outgrow its peers given the expected rapid growth of its renewable business.
該公司的2024E市盈率爲6.1倍，是同行業中最低的。考慮到可再生能源業務的預計快速增長，我們認爲這是不合理的。
Key Risks for Rating
評級的主要風險
Execution risk of its renewable business.
可再生能源業務的執行風險。
Faster-than-expected fall in new connections.
新連接下降速度比預期快。
Valuation
估值
Despite the cuts in our earnings forecasts, this comes with smaller capex and improved free cashlfow and smaller net debt in next few years. Hence, we raise our DCF valuation from HK$4.10 to HK$4.41. This is equal to 9.4x 2024E core P/E.
儘管我們的收益預測有所下調，但在未來幾年的資本支出減少和自由現金流和淨債務降低的情況下，我們的折現現金流估值從4.10港元上調至4.41港元。這相當於2024E核心市盈率的9.4倍。
譯文內容由第三人軟體翻譯。