ENN ENERGY(02688) 华泰证券·2025-03-28 06:53Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 109.9 billion RMB for 2024, a decrease of 3.5% year-on-year, with a net profit attributable to shareholders of 5.99 billion RMB, down 12.2% year-on-year. However, core profit exceeded expectations at 6.95 billion RMB, primarily due to better-than-expected sales and gross margins in the energy sector [1][2] - The major shareholder plans to privatize the company and achieve an "A+H" listing, indicating an acceleration in the integration of the natural gas industry chain, which is expected to unlock long-term value [1][4] - The company’s domestic core profit for 2024 increased by 10.2% to 6.71 billion RMB, driven by growth in retail gas volume and energy sales [2] Summary by Sections Financial Performance - The company’s free cash flow increased by 20% year-on-year to 3.73 billion RMB, supported by rising operating cash flow and reduced capital expenditures. The total dividend for 2024 reached 3 HKD per share, with a payout ratio of 45%, and a projected increase to 48% in 2025 [3] - The report slightly lowers the profit forecast for 2025-2026 by 2.7% and 6.7% to 7.23 billion RMB and 7.68 billion RMB respectively, with an estimated core profit of 8.08 billion RMB in 2027 [5][21] Market Position and Strategy - The privatization plan includes a cash payout of 24.5 HKD per share and the issuance of new H shares, which is expected to enhance operational efficiency and reduce costs through better integration of resources [4] - The company’s retail gas volume for 2024 is projected to grow by 4.2% to 26.2 billion cubic meters, with a stable gross margin expected to maintain a 6% increase in 2025 [2][21] Valuation Metrics - The target price for the company is set at 69.5 HKD, based on a 10x PE ratio for 2025 estimates, reflecting a slight adjustment from the previous target of 71.1 HKD [5][7] - The company’s market capitalization is approximately 74.66 billion HKD, with a current share price of 66.00 HKD as of March 27 [7]