【行业研究报告】华润燃气(一百)-Sound operating data in Aug with steady growth outlook

21Sep2023CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateCRGas(1193HK)SoundoperatingdatainAugwithsteadygrowthoutlookCRG’soperatingperformanceshowedbetterrecovery,withretailed/residential/industrial/commercialgassalesupby10%/13%/10%/17%YoYinAug.InJan-Aug2023,theretailedgassalesgrowthrecorded7.1%YoY.Fordollarmargin,CRGachievedRMB0.58/cbminAugandRMB0.52-0.53/cbminJan-Aug.WeregardCRGcanreachthetargetofgassalesgrowthof8%YoYandadollarmarginofRMB0.5/cbm.Additionally,thestrategicpartnershipwithCNPCwillstrengthengassupplyandthesolidcomprehensiveservicebusinessgrowthwillsupportCRG’sbetterperformance.WemaintainedourassumptionandourTPofHK$35.48.ReiterateBUY.RetailedgassalesrecordedsoundgrowthinAug,expectedCRGcanreachthefull-yeargassalestargetof8%YoY.ForJan-Aug,retailgasreachthefull-yeargassalestargetof8%YoY.ForJan-Aug,retailgassalesroseby7.1%YoY.Inparticular,residentialgassalesboostedby10%YoY,maintainingsteadygrowth,andindustrial/commercialgassalesrosebyover6%/8%YoYthankstothegasdemandrecoveryandlowbasein2H22.InAug2023,theoperatingdataperformedwell,withresidential/industrial/commercialgassalesascendedby13%/10%/17%YoY.For2023,CRG’smgmt.previouslyguideditsretailedgassalesgrowthwillachieve8%YoY.WebelieveCRGwillreachthetargetas:1)thegassalesrecoverycontinuesmonthly;2)bettergasdemandwithimprovedeconomy;3)lowbaseof2H22;4)thegassalesstructureoptimizesasthehigherproportionofcommercialgassales,leadingtohigherprofit.CRGachievedadollarmarginofRMB0.52cbminJan-Aug2023withRMB0.58cbminAug.ForJan-Aug2023,CRGrecordedadollarmarginriseofRMB0.09toaroundRMB0.52-0.53cbm,thankstothepositiveimplementationofpricepass-throughmeasures.CRG’sdollarmarginimprovedtoRMB0.58cbminAug2023andresidentialpricepass-throughcompletedaround60%,andCRGbelieveditwillachieve70%for2023.Eventhoughhigherwintergaspricemayweighon4Qdollarmargin,webelieveCRGwillslightlybeatitsdollarmargintargetofRMB.0.5cbmbackedbyactivegaspricepass-throughmeasuresimplementationinseveralregions,deliveringthecosttotheend-users.CRGsecuredlong-termgassupplythroughastrategicpartnershipwithCNPCnaturalgassalesbranch.InlateAug,CRGenteredintoa“StrategicFrameworkAgreement”and“MediumtoLong-TermContract”withCNPCnaturalgassalesbranch.Theywillprovidemediumtolong-termandstablenaturalgasresourcesof40bncbmtoCRGwitha10-yearcontractterm.ThecooperationwillstrengthenCRG’sgassupplyandbusinessextension.Slowerbutsteadygasconnectionandanticipatedfast-growingCSB.(comprehensiveservicebusiness).Giventheloosepropertypoliciesgraduallyintroduced,webelievethepaceofgasconnectionwilltendtobesteady.Wemaintainedourresidentialconnectionin2023unchangedat3.47mn.Otherwise,thegasappliancesalesdeliveredfavourableresultsduringthepromotionactivitiesof“9.15”.WebelieveCRG’sCSBwillmaintaintherevenuegrowthtargetofover18%YoY.MaintainTPunchanged.ReiterateBUY.CRGistradingat9xFY23EPE,lowerthanits3-yearavg.PE-1SDof10xPE.Webelievethevaluationisattractive.WemaintainedourkeyassumptionandTPofHK$35.48unchanged.WestayedoptimisticaboutCRG’ssteadygassalesgrowth,improveddollarmargin,andsolidCSBdevelopment.ReiterateBUY.