Jinwu Financial News | According to Haitong International Development Research, Xinao Energy (02688) achieved revenue of 113.86 billion yuan in 2023, up 3.5% year on year; gross margin reached 12.6%, down 1.7 pct year on year; operating profit margin reached 9.4%, up 0.4 pct year on year; net profit reached 6.0%, down 0.7 pct year on year; core profit of 7.586 billion yuan, down 4.8% year on year, mainly due to a 36% drop in overseas LNG sales related business. On the cost side, the company's expense ratio continued to decline year by year, reaching 5.36% during 2023. The growth rate of the gas retail business and pan-energy business slowed due to macroeconomic and climate change factors. Natural gas sales increased 2.8% year on year to 33.621 billion cubic meters, of which retail gas volume fell 3.1% year on year to 25.144 billion square meters. In terms of solvency, the company maintains a relatively low average financing cost of 3.53%, which can guarantee the continuous development of the company's business.
Looking ahead to 2024, the bank believes that due to the macro and industry environment, the decline in the company's new connections will still have a negative impact on future profits, but the company's overall operation is relatively steady. Based on the company's performance, the bank adjusted the company's main operating income for FY24-26 to be 1,224.75 (-3%)/132.386/143,859 billion yuan, respectively, and the corresponding net profit to mother was 81.34 (-23%) /86.33/9.357 billion yuan. Based on the DCF model, the target price was 73.99 HKD/share (-21%), maintaining the “superior to the market” rating.