佛燃能源：城燃利润率回升，供应链收入高增长

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 11.20 RMB, reflecting a 16x PE for 2024 [6][7]. Core Insights - The company reported a 5.4% year-on-year increase in net profit attributable to shareholders for 1H24, with total revenue of 14.1 billion RMB, a decrease of 27% year-on-year. The second quarter showed a revenue increase of 21% year-on-year and 29% quarter-on-quarter [1][2]. - The company’s dividend yield is currently at 4.4%, with projected yields of 4.7%, 5.4%, and 6.1% for 2024-2026 [1][4]. - The natural gas sales volume is expected to grow by 5.2% in 2024, with higher growth rates of 8.2% and 7.4% anticipated for 2025 and 2026, respectively [2]. Summary by Sections Financial Performance - In 1H24, the company achieved a net profit of 289 million RMB, with a non-recurring net profit of 275 million RMB, reflecting increases of 5.4% and 11.7% year-on-year, respectively [1]. - The company’s revenue for 1H24 was 141 billion RMB, with a significant recovery in the second quarter, where revenue reached 80 billion RMB [1][2]. Business Segments - The urban gas business generated 69 billion RMB in revenue for 1H24, down 12.6% year-on-year, primarily due to falling natural gas prices. The sales volume remained flat at 2.4 billion cubic meters [2]. - The supply chain business saw a remarkable growth of 155% year-on-year, contributing 68 billion RMB in revenue, with a focus on establishing a petrochemical supply chain network [3]. Cash Flow and Dividends - The operating cash flow for 1H24 decreased by 84% to 98 million RMB, attributed to increased inventory and reduced payables [4]. - The company maintained a high dividend payout ratio of 70% in 2023, with expectations for continued strong dividend levels in the coming years [4]. Valuation Metrics - The company’s projected net profit for 2024-2026 is estimated at 904 million, 1.03 billion, and 1.17 billion RMB, respectively, with an expected EPS of 0.70, 0.80, and 0.91 RMB [5][12]. - The company’s PE ratio for 2024 is projected at 14.88, which is competitive compared to peers [14].