20201130-招银国际-中国燃气-00384.HK-Outstanding_1HFY20_performance_6页_917kb

报告摘要

1HFY20 Core Earnings: CGH reported core earnings of HK$5,193 million, up 5.5% YoY.
Retail Gas Volume: Increased by 10.5% to 7.6 bcm, driven by strong demand.
Residential Connections: Slight decline of 3.5% YoY to 2.83 million households.
Free Cash Flow: Turned positive at ~HK$3.8 billion in 1HFY20, reflecting improved cash flow management.
Interim Dividend: Declared at HK$10 cents, same as the previous year.

Gas Sales Volume Growth: Expected to exceed 1.7 bcm, with contributions from:
- 0.7 bcm from new CTG users
- 0.3 bcm from NE China market
- 0.7–0.9 bcm from organic growth of existing projects
City Gas Volume Growth: Targeted at 15% for FY21E, with strong residential and industrial growth.

Metric	FY19A	FY20A	FY21E	FY22E	FY23E
Revenue (HK$ mn)	59,386	59,540	66,471	79,360	92,248
YoY Growth (%)	12.4	0.3	11.6	19.4	16.2
Net Income (HK$ mn)	8,224	9,188	10,620	13,140	15,486
EPS (HK$)	1.63	1.76	2.04	2.52	2.91
YoY Growth (%)	32.7	8.1	15.6	23.7	15.6
P/E (x)	17.1	15.8	13.7	11.1	9.6
P/B (x)	4.1	3.7	3.1	2.5	2.2
Yield (%)	1.6	1.8	2.1	2.6	3.0
ROE (%)	24.1	23.2	22.3	22.9	22.9
Net Gearing (%)	69.1	81.5	69.7	46.3	28.8

Free Cash Flow: Positive at HK$3.8 billion in 1HFY20, driven by strong operating cash flow and reduced CAPEX.
Earnings Revision: FY21E EPS trimmed by 0.5%, but FY22/23E projections lifted by 4.1%/4.2% due to margin expansion.
Market Sentiment: Improved as economic and social activities recovered, and cash flow performance strengthened.

Residential Connection Shift: Township connections declined by 42.5% YoY, but city residential connections grew by 23.7%.
LPG Smart Micro Grid Projects: Management confirmed these projects will replace CTG projects in Northern China, offering better cash flow performance.
Residential Connections Target: Maintained at 5.5–6.0 million households for FY21E.

Revenue Growth: VAS revenue surged by 53.1% YoY to HK$3.38 billion.
Gross Profit: Increased by 65.4% YoY to HK$1.36 billion.
Operating Profit Contribution: HK$1 billion, accounting for 15.6% of total operating profit.
ARPU: Estimated at HK$89.1 for 1HFY21, up 31.6% YoY.

Rating: BUY
Target Price (TP): HK$37.12 (unchanged)
Up/Downside: +33.0%
Current Price: HK$27.90
Reasoning: Strong cash flow performance, improving market sentiment, and continued growth expectations.

Ratio	FY19A	FY20A	FY21E	FY22E	FY23E
Operating Margin (%)	21.0	23.7	24.3	24.7	24.7
Pre-tax Margin (%)	18.8	21.4	22.2	22.8	23.0
Net Margin (%)	13.8	15.4	16.0	16.6	16.8
ROE (%)	24.1	23.2	22.3	22.9	22.9
ROA (%)	7.5	8.2	8.3	9.1	9.5
EPS (HK$)	1.63	1.76	2.04	2.52	2.91
DPS (HK$)	0.44	0.50	0.58	0.72	0.83
BVPS (HK$)	6.77	7.59	9.11	11.02	12.7

BUY: Potential return of over 15% over next 12 months
HOLD: Potential return of +15% to -10% over next 12 months
SELL: Potential loss of over 10% over next 12 months
NOT RATED: Not rated by CMBIS
OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark

The analyst certifies that the views expressed reflect personal opinions and are not influenced by compensation.
The analyst and associates did not trade in the stock covered within 30 days before or after the report's issue date.
The report is not an offer to buy or sell securities and is for informational purposes only.
CMBIS is not a registered broker-dealer in the United States and is not subject to U.S. research report rules.

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