2024 Annual Report 年報 學標杆, 勇創新, 提質增效 Bench-marking and Innovating for Quality and Efficiency Enhancement 公司簡介 Corporate Profile 華潤集團於中國的城市燃氣分銷旗艦 華潤燃氣控股有限公司（「華潤燃氣」）主要由中國最大 的國有企業集團之一的華潤（集團）有限公司擁有。作為 中國領先的燃氣公用事業集團，華潤燃氣主要經營業務 包括天然氣購買及銷售、管道設施建設及運營、車船用 氣、冷熱電綜合能源、燃氣綜合服務等。華潤燃氣的業 務策略性地分佈於全國各地，主要位於經濟較發達和人 口密集的地區以及天然氣儲量豐富的地區。 憑藉良好的行業基礎及本集團的執行能力，華潤燃氣於 二零二四年繼續通過內涵式增長實現穩步擴張。於二零 二四年末，華潤燃氣的城市燃氣項目總共達276個，分 佈於中國25個省份，其中包括15個省會城巿及76個地 級市，年燃氣總銷量達約399億立方米及客戶數達6,062 萬戶。 能源結構優化和環境污染治理將推動中國天然氣消費持 續增長。中國政府近年來採取多項措施提倡對污染較少 的能源資源的發展及 ...

Investment Rating - The investment rating for China Resources Gas (01193.HK) is "Buy" (maintained) [1] Core Views - The company's performance is under pressure, with a reported revenue of HKD 102.68 billion for 2024, a year-on-year increase of 0.90%. However, the net profit attributable to shareholders decreased by 21.74% to HKD 4.09 billion [7] - The company declared a dividend of HKD 0.95 per share for the year, corresponding to a payout ratio of 53% of core profits and a dividend yield of 4.1% [7] - The report highlights that the company's core profit growth was below expectations, primarily due to slower growth in retail gas volume and revenue from integrated energy and services [7] Summary by Sections Financial Performance - For 2024, total revenue is projected at HKD 102,676 million, with a slight increase of 0.90% year-on-year. The net profit attributable to shareholders is expected to be HKD 4,088 million, reflecting a decrease of 21.74% [1][7] - The earnings per share (EPS) for 2024 is estimated at HKD 1.77, with a P/E ratio of 13.13 [1][8] Business Segments - **City Gas**: Revenue increased by 3.4% to HKD 88.80 billion, with retail gas volume up by 2.9% to 39.91 billion cubic meters [7] - **Connection Services**: Revenue decreased by 15.0% to HKD 9.25 billion, with new residential connections down by 15.8% [7] - **Integrated Services**: Revenue grew by 4.0% to HKD 4.21 billion, with a projected growth rate of 20%-30% for 2025 [7] - **Integrated Energy**: Revenue increased by 13.8% to HKD 1.87 billion, with energy sales volume up by 27.2% [7] Cash Flow and Dividends - The company reported a free cash flow of HKD 2.58 billion for 2024, an increase of 14.2% year-on-year [7] - The total capital expenditure for 2024 is projected at HKD 4.42 billion, a decrease from the previous year [7] Earnings Forecast - The forecast for net profit attributable to shareholders is adjusted to HKD 4.46 billion for 2025 and HKD 4.90 billion for 2026, with a new estimate of HKD 5.38 billion for 2027 [7][8]

Investment Rating - The investment rating for China Resources Gas (01193.HK) is "Buy" (maintained) [1] Core Views - The company's performance is under pressure, with a reported revenue of HKD 102.68 billion for 2024, a year-on-year increase of 0.90%. However, the net profit attributable to shareholders decreased by 21.74% to HKD 4.09 billion [7] - The company declared a dividend of HKD 0.95 per share for the year, corresponding to a payout ratio of 53% of core profits and a dividend yield of 4.1% [7] - The report indicates that the company's core profit growth is not meeting expectations, primarily due to lower-than-expected retail gas volume growth and revenue from integrated energy and services [7] Summary by Sections Financial Performance - For 2024, total revenue is projected at HKD 102,676 million, with a slight increase of 0.90% year-on-year. The net profit attributable to shareholders is expected to be HKD 4,088 million, reflecting a decrease of 21.74% [1][7] - The earnings per share (EPS) for 2024 is estimated at HKD 1.77, with a price-to-earnings (P/E) ratio of 13.13 [1][8] Business Segments - **City Gas**: Revenue increased by 3.4% to HKD 88.80 billion, with a segment profit margin of 65.1%. Retail gas volume grew by 2.9% to 39.91 billion cubic meters [7] - **Connection Services**: Revenue decreased by 15.0% to HKD 9.25 billion, with a significant drop in new connections for residential users [7] - **Integrated Services**: Revenue grew by 4.0% to HKD 4.21 billion, with a projected growth rate of 20%-30% for 2025 [7] - **Integrated Energy**: Revenue increased by 13.8% to HKD 1.87 billion, with energy sales volume rising by 27.2% [7] Cash Flow and Dividends - The company reported a free cash flow of HKD 2.58 billion for 2024, an increase of 14.2% year-on-year. Capital expenditures are projected at HKD 4.42 billion [7] - The dividend for 2024 is set at HKD 0.95 per share, with expectations to increase the dividend amount or payout ratio in 2025 [7] Earnings Forecast - The forecast for net profit attributable to shareholders is adjusted to HKD 4.46 billion for 2025 and HKD 4.90 billion for 2026, with a growth rate of approximately 9.2% to 9.9% for the following years [7][8]

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 20.80, representing a potential downside of 26.2% from the current price of HKD 28.20 [1][4][17]. Core Insights - The company's operational and profit growth for 2024 is under pressure, necessitating a rebalancing of its future profit structure [2]. - The core profit for 2024 is expected to be significantly below market expectations, with a forecast of HKD 4.15 billion, which is 30% lower than the previous expectations [7]. - The company has seen a 20% year-on-year decrease in residential connections, which is a major factor contributing to the lower-than-expected profitability [7]. - The retail gas volume growth for the year is projected at 2.9%, below the anticipated 5%, influenced by a warmer winter [7]. - The dividend policy appears irregular, causing confusion among investors, with a projected decline in the full-year dividend payout ratio to 52% from 2023 [7]. Financial Overview - Revenue is projected to grow from HKD 101.27 billion in 2023 to HKD 102.68 billion in 2024, reflecting a modest year-on-year growth of 1.4% [3][18]. - Net profit is expected to decline from HKD 5.22 billion in 2023 to HKD 4.09 billion in 2024, marking a significant year-on-year decrease of 21.7% [3][18]. - The earnings per share (EPS) is forecasted to remain flat at HKD 1.79 for 2024, with a slight increase to HKD 1.89 in 2025 [3][18]. - The company’s price-to-earnings (P/E) ratio is projected to decrease from 15.7 in 2023 to 14.9 in 2025, indicating a declining valuation trend [3][18]. Operational Data - The residential gas sales volume is expected to increase from 9.44 million cubic meters in 2023 to 10.04 million cubic meters in 2024, representing a growth rate of 2.9% [10]. - The company anticipates a decrease in new residential connections, with projections of 2.69 million in 2024, down from 3.37 million in 2023 [10]. - The retail gas margin is expected to slightly improve to RMB 0.54 per cubic meter by 2025 [10].

Investment Rating - The investment rating for China Resources Gas (01193) is "Buy" with a target price not specified [6]. Core Views - The company reported a revenue of HKD 102.68 billion for 2024, a year-on-year increase of 1.4%. The core profit was HKD 4.15 billion, showing a slight increase of 0.02%, while the profit attributable to shareholders decreased by 21.7% to HKD 4.09 billion [1]. - The gas sales business demonstrated resilience with a total gas sales volume of 39.91 billion cubic meters, up 2.9% year-on-year. The average gas sales cost decreased to HKD 2.89 per cubic meter, leading to a gross margin of HKD 0.53 per cubic meter, an increase of 0.02 year-on-year [2]. - The new user connection growth slowed down due to a decline in new construction in the real estate sector, with new residential users decreasing by 15.8% to 2.791 million. The profit from the connection business fell by 27.6% to HKD 2.93 billion [3]. - The comprehensive service business achieved a revenue of HKD 4.21 billion, with a profit of HKD 1.4 billion, while the comprehensive energy business saw a revenue increase of 13.8% to HKD 1.87 billion [4]. - The company maintained a stable dividend policy, proposing a core dividend of HKD 0.95 per share, a 3.4% increase year-on-year, with a payout ratio of 53% [5]. Summary by Sections Financial Performance - Revenue for 2024 was HKD 102.68 billion, a 1.4% increase year-on-year. Core profit was HKD 4.15 billion, with a slight increase of 0.02%. Profit attributable to shareholders decreased by 21.7% to HKD 4.09 billion [1]. Gas Sales Business - Total gas sales volume reached 39.91 billion cubic meters, up 2.9% year-on-year. The average gas sales cost was HKD 2.89 per cubic meter, down by HKD 0.1, resulting in a gross margin of HKD 0.53 per cubic meter, an increase of HKD 0.02 year-on-year. The profit from gas sales was HKD 7.975 billion, reflecting an 8.6% increase [2]. User Connections - New residential user connections decreased by 15.8% to 2.791 million due to a decline in real estate construction. The profit from the connection business fell by 27.6% to HKD 2.93 billion, with a profit margin of 31.6%, down approximately 5.5 percentage points [3]. Comprehensive Services and Energy - The comprehensive service business generated HKD 4.21 billion in revenue, with a profit of HKD 1.4 billion. The comprehensive energy business saw a revenue increase of 13.8% to HKD 1.87 billion, with a gross profit of HKD 360 million, a 33.6% increase [4]. Dividend Policy - The company proposed a core dividend of HKD 0.95 per share, a 3.4% increase year-on-year, with a payout ratio of 53% [5]. Profit Forecast and Valuation - The company expects pressure on connection business in 2025, but growth in gas volume and gross margin indicates resilience. Projected net profits for 2025-2027 are HKD 4.33 billion, HKD 5.02 billion, and HKD 5.87 billion, representing year-on-year growth of 5.9%, 15.9%, and 17% respectively [5].

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance is under pressure due to a warm winter and impacts from the real estate sector, but the dividend logic is gradually being realized [5] - The company reported a revenue of HKD 102.68 billion for 2024, a year-on-year increase of 1.4%, and a net profit of HKD 4.09 billion, a decrease of 21.7% compared to the previous year, which was below market expectations [7] - The company plans to distribute a dividend of HKD 0.95 per share for 2024, with the cash dividend amounting to 52.71% of the net profit [7] Financial Performance Summary - Revenue projections for the company are as follows: - 2023: HKD 101.27 billion - 2024: HKD 102.68 billion - 2025E: HKD 105.54 billion - 2026E: HKD 108.01 billion - 2027E: HKD 110.57 billion - Net profit projections are as follows: - 2023: HKD 5.22 billion - 2024: HKD 4.09 billion - 2025E: HKD 4.72 billion - 2026E: HKD 5.51 billion - 2027E: HKD 6.19 billion - The company’s earnings per share (EPS) for 2025 is projected to be HKD 2.04, with a price-to-earnings (P/E) ratio of 14 [6][8] Operational Insights - Retail gas sales volume for 2024 is expected to reach 39.91 billion cubic meters, a year-on-year increase of 2.9%, with residential, industrial, and commercial sales volumes growing by 6.3%, 1.5%, and 3.8% respectively [7] - The company’s connection profit continues to shrink, with a reduction in new residential connections by 620,000 to 2.693 million, leading to a decline in connection business profits [7] - The company’s capital expenditure for 2024 is projected at HKD 4.42 billion, a decrease of HKD 3.47 billion year-on-year, contributing to an improvement in free cash flow [7] Future Outlook - The company is expected to see a rebound in performance as the real estate market stabilizes, with a focus on optimizing its gas sales business and improving profitability [7] - The long-term downward trend in gas prices is anticipated to enhance cost efficiency, with the company signing a 15-year LNG supply agreement starting in 2027 [7]

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 20.80, indicating a potential downside of 26.2% from the current price of HKD 28.20 [1][4][17]. Core Insights - The company's operational and profit growth for 2024 is under pressure, necessitating a rebalancing of its future profit structure [2]. - The core profit for 2024 is expected to be significantly below market expectations, with a forecast of HKD 4.15 billion, which is 30% lower than previous estimates [7]. - The company has seen a 20% year-on-year decrease in residential connections, which is a major factor contributing to the disappointing earnings [7]. - Despite a 67% increase in interim dividends, the final dividend is expected to drop by 30% due to weaker performance in the second half of the year [7]. - The company is projected to experience a compound annual growth rate (CAGR) of only 6% in profits from 2024 to 2027 [7]. Financial Overview - Revenue is projected to grow from HKD 101.27 billion in 2023 to HKD 111.29 billion by 2027, with a CAGR of 3.2% [3][18]. - Net profit is expected to decline from HKD 5.22 billion in 2023 to HKD 4.99 billion in 2027, reflecting a downward trend in profitability [3][18]. - The earnings per share (EPS) is forecasted to increase gradually from HKD 1.79 in 2023 to HKD 2.16 in 2027, with a notable adjustment of -32.5% for 2025 [3][18]. - The company’s price-to-earnings (P/E) ratio is projected to decrease from 15.7 in 2023 to 13.1 by 2027, indicating a declining valuation trend [3][18]. Operational Data - The residential gas sales volume is expected to grow from 9.44 million cubic meters in 2023 to 12.01 million cubic meters by 2027, with a growth rate of 3.3% [10]. - The company anticipates a decrease in new residential connections, projecting 2.30 million in 2025, down 14% from the previous year [10]. - The retail gas margin is expected to stabilize at RMB 0.54 per cubic meter by 2025 [10].

Financial Performance - Revenue for the year ended December 31, 2024, was HKD 102,676 million, an increase of 1.4% from HKD 101,272 million in 2023[3] - Core profit for the same period was HKD 4,148 million, showing a marginal increase of 0.02% compared to HKD 4,147 million in 2023[3] - Profit attributable to the company's owners decreased by 21.7% to HKD 4,088 million from HKD 5,224 million in 2023[3] - Total comprehensive income for the year was HKD 4,410 million, a decrease from HKD 5,428 million in 2023[5] - Basic earnings per share for the year were HKD 1.80, down from HKD 2.30 in 2023[5] - Total revenue for the year ended December 31, 2024, was HKD 102,675,888,000, with a pre-tax profit of HKD 7,746,214,000[17] - The company achieved a total classified profit of HKD 13,079,019 for the year, with significant contributions from various service segments[20] - The company’s interest income from loans to subsidiaries increased significantly to HKD 53,772 in 2024 from HKD 12,024 in 2023, indicating improved financial management[25] - The company’s employee costs totaled HKD 6,642,541 for the year, showing an increase from HKD 6,338,861 in the previous year, reflecting growth in workforce and compensation[26] Sales and Revenue Breakdown - Total gas sales volume increased by 2.9% to 39,907 million cubic meters from 38,784 million cubic meters in 2023[3] - The revenue breakdown includes sales of gas fuel and related products at HKD 85,565,630,000, gas connection services at HKD 9,250,793,000, and integrated services at HKD 4,205,793,000[17] - Total natural gas sales increased by 2.9% to 39.91 billion cubic meters, with industrial sales at 20.42 billion cubic meters (up 1.5%) and residential sales at 10.04 billion cubic meters (up 6.3%) [37] - The company developed 53,000 new industrial users and 2.693 million new residential users, with the average gasification rate increasing from 59.3% to 60.4% [38] Assets and Liabilities - Non-current assets increased to HKD 103,014 million from HKD 102,417 million in 2023[6] - Current liabilities rose to HKD 53,837 million from HKD 51,109 million in 2023[6] - Total assets as of December 31, 2024, amounted to HKD 132,482,695,000, with classified assets of HKD 92,618,333,000[18] - Total liabilities were reported at HKD 68,511,719,000, with classified liabilities of HKD 31,456,819,000[18] - Trade receivables decreased to HKD 9.82 billion from HKD 11.44 billion, with receivables aged 0 to 90 days at HKD 6.15 billion [32] - Trade payables decreased to HKD 11.98 billion from HKD 14.44 billion, with payables aged 0 to 90 days at HKD 9.16 billion [33] Dividends and Shareholder Information - The proposed final dividend for the year is HKD 0.70 per share, down from HKD 1.0069 per share in the previous year, totaling HKD 1.58777 billion [29] - The proposed final dividend for 2024 will be paid in Hong Kong dollars, with an option for shareholders to receive it in Renminbi at a rate of HKD 1.0 to RMB 0.92319[51] - The final dividend per share in Renminbi will be RMB 0.6462358 for those opting for this currency[51] - The proposed final dividend for the year ending December 31, 2024, is HKD 0.70 per share, totaling HKD 0.95 per share for the year, down from HKD 1.1569 per share in 2023[48] Strategic Initiatives and Market Expansion - The company plans to continue expanding its market presence and enhancing operational efficiency in response to the green energy transition [35] - The company is focusing on strategic partnerships and market expansion to leverage opportunities in urban redevelopment and industrial customer development [38] - In 2024, the company signed 7 new projects and registered 4 projects, expanding its franchise area by 2,678 square kilometers, with a potential gas sales volume of 610 million cubic meters and 98,000 new residential users[39] - The company is actively expanding into Hong Kong and overseas markets, establishing investment platforms and joint ventures to promote business growth[42] Governance and Compliance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange rules and has complied with most applicable provisions[53] - The company deviated from the governance code regarding the formal appointment letters for directors and the separation of roles between the chairman and CEO[54] - All directors have complied with the standard code of conduct for securities trading during the reporting period[55] - No significant events occurred after the reporting date that could impact the company's operations or performance[56] Environmental, Social, and Governance (ESG) Focus - The company emphasizes ESG management, maintaining an MSCI ESG rating of A, and is committed to sustainable development and compliance with environmental standards[44] - The company aims to enhance its comprehensive energy solutions and capitalize on the growing demand for clean energy in the Chinese market[46] Miscellaneous - The chairman expressed gratitude to business partners, customers, and shareholders for their support and acknowledged the hard work of all employees[58] - The annual report will be sent to shareholders and published on the Hong Kong Stock Exchange website and the company's website[57] - The company will suspend share transfer registration from May 23, 2025, to May 28, 2025, for the annual general meeting[50]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a focus on its core gas assets and a solid dividend logic [5][10]. Core Views - The company is positioned as a national leader in city gas, backed by China Resources Group, with a significant presence in first- and second-tier cities, enhancing its core asset attributes [9][17]. - The report anticipates a recovery in profit margins due to lower gas prices and improved sales pricing mechanisms, which are expected to support revenue growth [12][42]. - The company’s cash flow has significantly improved, with a notable increase in operating cash flow and a reduction in capital expenditures, indicating a strong potential for dividend growth [22][24]. Summary by Sections Market Performance - The closing price as of March 5, 2025, was HKD 26.10, with a market capitalization of HKD 60,395.74 million [3]. Financial Projections - The projected net profit for 2024-2026 is HKD 55.63 billion, HKD 61.72 billion, and HKD 67.65 billion respectively, with corresponding PE ratios of 11, 10, and 9 [6][10]. - The expected dividend yields for 2024-2026 are 4.6%, 5.1%, and 5.6% based on the current stock price [6][10]. Business Overview - The company operates 276 city gas projects, with a retail gas volume increasing from 1.371 billion cubic meters in 2008 to 38.784 billion cubic meters in 2023, maintaining a market share of 9.83% in 2023 [17][18]. - The revenue structure has shifted, with gas sales becoming the primary profit driver, accounting for 56.15% of tax-preferred profits in 2023 [18][20]. Cash Flow and Dividend Policy - The operating cash flow reached HKD 10.16 billion in 2023, a year-on-year increase of 133.4%, with a free cash flow of HKD 1.9 billion in the first half of 2024 [22][24]. - The dividend payout ratio has increased from 29.8% in 2016 to 50.3% in 2023, with a compound annual growth rate of 25.15% in dividends per share since 2008 [25][60]. Strategic Positioning - The company is strategically positioned in economically developed regions, benefiting from high population density and industrial clustering, which supports gas sales growth [38][40]. - The report highlights the potential for further market consolidation and growth in the city gas sector, driven by government policies promoting mergers and acquisitions [40][46]. Risk Management - The company has managed to reduce its reliance on connection profits, with a significant increase in comprehensive service and energy business profits, which helps mitigate risks associated with declining connection revenues [12][53].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of HKD 26.75 and a target value of HKD 34.20 [4][248]. Core Insights - The company is a leading urban gas provider in China, with a strong focus on city gas operations and a significant market share, achieving a compound annual growth rate (CAGR) of 25% in gas sales from 2008 to 2023 [9][39]. - The company is expected to benefit from the recovery of LNG prices and the implementation of pricing policies that will enhance profitability [9][248]. - The report highlights the company's robust financial health, with a return on equity (ROE) consistently above 10% and a dividend payout ratio increasing to 50.3% in 2023, indicating strong shareholder returns [9][94]. Summary by Sections 1. Company Overview - The company is backed by China Resources Group and has been deeply involved in the urban gas sector for over 20 years, ranking among the top three in gas sales nationwide [21][23]. - As of 2024H1, the company operates 276 urban gas projects across 25 provinces, with a coverage of 97.08 million users [31][39]. 2. Pricing and Profitability - The company has seen a recovery in profitability due to the stabilization of gas prices and the implementation of a pricing mechanism that aligns sales prices with procurement costs [9][160]. - The average selling price of gas in 2023 was HKD 3.50 per cubic meter, with a gross margin of HKD 0.51 per cubic meter, showing improvement from previous years [160][248]. 3. Business Segments - Gas sales accounted for 82% of total revenue in 2023, with a significant contribution from the connection business, which, despite its smaller share, has a high profit margin [55][241]. - The comprehensive service segment has been growing rapidly, with revenues reaching HKD 40.45 billion in 2023, driven by kitchen and heating services [202][204]. 4. Financial Projections - The company is projected to achieve net profits of HKD 50 billion, HKD 57 billion, and HKD 63 billion for the years 2024 to 2026, respectively, with corresponding earnings per share (EPS) of HKD 2.17, HKD 2.44, and HKD 2.73 [9][243]. - The report anticipates a gradual recovery in gross margins, with expected improvements in the gas sales segment due to favorable pricing policies [239][240]. 5. Market Dynamics - The urban gas market in China is expected to continue growing, driven by increasing urbanization and the demand for cleaner energy sources [97][106]. - The company is well-positioned to capitalize on these trends, with a strategic focus on expanding its service offerings and enhancing customer engagement through innovative service models [207][212].