【行业研究报告】新奥能源-3Q22 operational data in line; smooth progress towards net-zero target

2Nov2022
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
ENNEnergy(2688HK)
3Q22operationaldatainline;smoothprogress
towardsnet-zerotarget
ENNEnergy(ENN)announcedinline3Q22operationaldata.Retailgassales
volumemaintainedlow-single-digitgrowthandgasdollarmarginstabledat
RMB0.53/cbmduetoincreasingcostandshrinkingdemandduringCovid-19
pandemiccontrols;IEbusinessandvalue-addedsegmentcontinueditsrobust
growth.Lookingahead,ENN’smgmt.guidedoptimisticgassalesvolumegrowth
andstabilizingdollarmargininQ4.Meanwhile,theymaintainstrongfaithonIE
businessandvalue-addedbusinesssurge.Currently,ENNistradingat10x
FY23PE.TofactorinENN’sresilientfast-growingIEbusinessandVAS
business,ourSOTPTPisHK$132.2/pershare,reflecting18.7xforwardPE
(around+1SDof5-yearavg.PE).WetransfercoveragewithBUYrating.
Inline3Q22retailedgassalesgrowthanddollarmargin.ENN’sretailgas
salesvolumeroseby4.4%YoYto18.83bcm,whichwasinlinewiththeprevious
salesvolumeroseby4.4%YoYto18.83bcm,whichwasinlinewiththeprevious
mgmt.’sguidanceandourexpectation.AsC&l’soperationswereaffected
seriouslybyCovid-19pandemiccontrols,C&l’sgassalesvolumeincreasedonly
4.4%YoY.Butmeanwhile,ENNhasanoptimisticviewonits4Qgassalesfor
theupcomingheatingseason,andmaintainsfull-yearretailedgassalesgrowth
targetat5-8%YoY.Intermsof3Qdollarmargin,ENNrecordedRMB0.53/cbm,
thankstothediversifiedgassourcesandeffectivepricepass-throughmeasures.
For4Q,mgmt.mentionedthattheyhaveagreedonreasonablewintergasprices
withupstreamsuppliersandwasconfidenttoreachthefull-yeartargetof
RMB0.5/cbm.Giventheimprovedgaspricepass-throughmeasuresandstable
gascostoutlook,weestimatedollarmargintoachieveRMB0.5/0.53/0.58cbm
forFY22/23/24E.
Fast-growingcoreIntegratedEnergy(IE)businesswithabetterESG
image.Asthepioneerofenergytransformation,ENNhasdedicatedtohelp
clientswithbetterenergyconservationandemissionreductionviaIEbusiness.
Asof3Q22,189integratedenergyprojectshavebeenoperated.Thecumulative
salesvolumeofintegratedenergywentup29.5%YoYto18,208mnkWh,in
whichrenewableenergyaccountedforaround21%(~36%asthelong-term
goal).For2022,mgmt.guidedtherevenueofIEsegmenttosurgeby50%YoY.
Besides,ENNvaluesESGdevelopmentanditsESGratingshasbeenupgraded
byMSCIforfouryears.
Value-addedservice(VAS)achievedsignificantgrowth.Underthe
consumptionupgradingtrend,ENNactivelypromotedlow-carbonheating,
householdproductsandservices,whichboosted8%and34%YoYincreases.
Currently,thepenetrationrateofvalue-addedbusinessinENN’snewcustomer
baseisabout33%.WebelieveVASwillmaintainrobustgrowthmomentumin
4Q.
OurTPisHK$132.2.MaintainBUYrating.ENNistradingat10xFY23PE.As
webelieveENNhasabetterESGimagethanpeersforitsleadingIEbusiness,and
ENN’smgmt.alsoguidedstablegasdollarmarginandincreasinggasdemandin
Q4,ourSOTPtargetpriceisHK$132.2/pershare,reflectingaround18.7x
forwardP/E(around+1SDof5-yearaveragePE).WemaintainBUYratingonENN
Energy.