\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 803 Enn Natural Gas Co.Ltd(600803) )
Event: the company released its annual report for 2021. The annual operating revenue was 116031 billion yuan, a year-on-year increase of 31.71%, and the net profit attributable to the parent company was 4.102 billion yuan, a year-on-year increase of 94.67%; Net profit deducted from non parent company was RMB 3.531 billion, with a year-on-year increase of 170.53%. At the same time, the company announced the share repurchase plan, which plans to spend RMB 100200 million to repurchase the company’s shares at a price of no more than 25 yuan / share in the form of call auction for equity incentive.
With the steady growth of the main business of urban fuel under the high gas price, the customer resources accumulated by nuggets for decades have expanded from gas to new energy: Enn Natural Gas Co.Ltd(600803) holds 32.68% equity of Hong Kong stock ENN energy (2688. HK). ENN energy is the leader of urban fuel in China. According to its annual performance announcement in 2021, the annual operating revenue was 94.19 billion yuan, a year-on-year increase of 30.93%; The net profit attributable to the parent company was 7.755 billion yuan, a year-on-year increase of 23.5%; The core profit was 7.154 billion yuan, a year-on-year increase of 14.6%. Under the high gas price, the gross margin of ENN energy’s natural gas retail business decreased from 0.6 yuan / m3 in 2020 to 0.51 yuan / m3 in 2021. However, relying on the growth of connection business brought by comprehensive energy, value-added services and new user expansion, the performance still improved steadily. In the future, ENN energy is expected to dig deep into the high-quality customer resources accumulated for decades and expand from gas to new energy, especially the comprehensive energy business. Comprehensive energy business can also be simply understood as “gas + new energy”. Based on industrial and commercial gas business, ENN energy has accumulated a large number of high-quality industrial customers for decades. According to the company’s announcement, by the end of 2021, the number of industrial and commercial customers had reached 202000. In the future, ENN energy will vigorously expand comprehensive energy services in the fields of low-carbon factories, low-carbon parks, low-carbon buildings and low-carbon transportation, and actively develop industrial and commercial roof photovoltaic. According to the company’s annual report, the scale of distributed photovoltaic projects signed during the year reached 380mW. According to the information of the public performance exchange meeting in 2021, ENN energy aims to achieve a 12-15% increase in core profit in 2022, which is expected to make a positive contribution to Enn Natural Gas Co.Ltd(600803) performance.
The terminal asset injection is imminent to build the whole natural gas industry chain: the company announced on October 27 that it would purchase 90% of the equity of ENN Zhoushan by issuing shares and paying cash. Previously, the company only had the right to operate the terminal. After the asset reorganization, the company will further expand the coverage pattern of the whole natural gas industry chain: the upstream has diversified natural gas supply subjects and channels; The midstream LNG terminal shall give full play to its receiving, storage and transportation capacity; Further expand the operation territory of urban fuel gas in the downstream. According to the company’s announcement, at present, phase I and phase II of Zhoushan LNG terminal have been put into operation, and the processing capacity is expected to reach 8 million tons / year. After the completion of phase III, the processing capacity is expected to reach 10 million tons / year. The asset injection of the terminal will further enhance the core competitiveness of the company. According to the announcement, the LNG processing capacity of Zhoushan terminal in 2020 and the first half of 2021 was 2.5492 million tons and 1.7789 million tons respectively, corresponding to a net profit of 336 million yuan and 258 million yuan. Relying on the direct selling gas business of the terminal, the direct selling gas volume reached 4.1 billion m3 in 2021, with a net profit of about 679 million yuan. After the injection of Zhoushan LNG terminal, its terminal warehousing and logistics business and direct gas business will become another important support for the company’s performance.
New and old energy resonates, and the performance of the coal sector is bright: in addition to the main business of natural gas, the company also has three other business sectors: coal mining, coal chemical industry and energy engineering. In 2021, benefiting from the rise of coal price, the performance of the coal sector was bright, and Xinneng mining realized a net profit of 1.12 billion yuan. Considering that the sales volume of self-produced coal in 2021 decreased by 38.39% over the previous year, if the output returns to normal in 2022, the performance of the coal sector is expected to be further improved; The coal chemical industry business is subject to high coal prices, realizing a net profit of – 480 million yuan; The net profit of energy engineering business was 440 million yuan.
The share repurchase shows confidence, and the fixed increase price has been significantly inverted with the current stock price: the company announced the share repurchase plan and plans to spend RMB 100200 million to repurchase the company’s shares at a price of no more than 25 yuan / share in the form of call auction for equity incentive, demonstrating the company’s confidence in future business development. In the plan that the company plans to purchase 90% of the equity of ENN Zhoushan held by the controlling shareholder by issuing shares and paying cash, the share issuance price is determined to be 17.22 yuan / share. At present, the share price has been significantly inverted with the issuance price.
Investment suggestion: we estimate that the company’s operating revenue from 2022 to 2024 will be 125937 billion yuan, 137540 billion yuan and 152503 billion yuan respectively, with growth rates of 8.5%, 9.2% and 10.9% respectively, and the net profit attributable to the parent company will be 4.490 billion yuan, 5.087 billion yuan and 6.065 billion yuan respectively, with growth rates of 9.5%, 13.3% and 19.2% respectively; Maintain the investment rating of Buy-A, and the six-month target price is 25.0 yuan.
Risk warning: the risk that the demand for natural gas is less than expected, the risk that overseas LNG prices continue to rise, the risk that coal prices fall, and the risk that policy promotion is less than expected
