20230828-招银国际-华润燃气_一百_-01193.HK-1H23_results_slightly_beat__continue_to_implement__1+2+N_strategy_6页_1005kb

CR Gas (1193 HK) - 2023 H1 Results and Outlook

Key Points

Financial Performance

• First-half 2023 net profit rose by 16% year-on-year to HK$3.545 billion, exceeding market expectations of HK$3.361 billion.
• Revenue grew 0.6% year-on-year to HK$48.4 billion, driven by increased piped gas sales and comprehensive service business.
• Gas sales volume increased by 6.9% year-on-year to 19.8 bcm, with commercial gas contributing significantly to growth.
• Gas dollar margin improved to RMB0.5/cbm; profit margin declined slightly to 18%.
• Dividend maintained at HK$0.15 per share.

Business Strategy

• CR Gas continues its “1+2+N” business development strategy, focusing on new growth areas like comprehensive service business (CSB) and integrated-energy (IE) initiatives.
• CSB turnover increased by 8% year-on-year to HK$1.47 billion, with higher contributions.
• Future potential lies in expanding market share for electricity-gas-heat and insurance products, while pursuing green and low-carbon business.

Analyst Recommendation

• Adjusted target price to HK$35.48, down from previous HK$39.0, reflecting lower earnings expectations due to slow economic recovery.
• Maintain “BUY” rating, citing an attractive valuation with a forward P/E of 8.78x, below average.
• Earnings for 2023 are expected to decline slightly, with a focus on gradual gas consumption recovery in the second half.

Valuation and Outlook

• Trading at FY23E 8.78x forward P/E, indicating a fair value with upside potential under the “1+2+N” strategy.
• Cash flow analysis shows steady operational and investing activities, though financing cash outflows include dividends.
• Overall financial health remains stable, with projected revenue growth supported by industry recovery.

Brief Disclosure

• This report includes standard analyst certifications and risk disclosures, emphasizing that past performance is not indicative of future results, and investments may involve market risks. For full details, refer to the last page.