新奥能源(02688.HK):Supply is the golden key

2018-02-12 15:06 港股研报君 阅读 1304

机构:招商证券

评级:BUY

目标价:66港币

Supply is the golden key 

Gas sales growth remained strong (+30% YoY) in Jul-Nov17  

ENN Energy may source cheaper spot LNG price during winter season starting from 2H2018  

Reiterate BUY rating and TP at HK$66.0 

Rapid gas sales growth in Jul-Nov 2017

Following a 42% YoY gas sales volume growth in 1H17, the momentum remained robust in Jul-Nov 2017; city gas sales volume was up >25% YoY (C/I users: >30% YoY and residential users: >25% YoY) and wholesale gas volume also shot up by >50% YoY, mainly driven by strong demand for coal-to-gas conversion and continuous recovery in industrial activities. We believe management’s 2017 gas sales volume growth guidance of >30% YoY (including wholesales gas) is achievable. With an expected national gas sales demand growth of 15% YoY in 2018, we estimate ENN Energy’s gas sales growth will be around 20% YoY. 

LNG supply in 2H18 helps mitigate the margin pressure in next winter season 

During this winter season, the upstream players increased the nonresidential city gate price by around 15% on average. So far, ENN Energy has obtained the cost pass-through for 70% of its affected projects. As a result, management expects the gas dollar margin to drop from RMB0.66/cu m in 1H17 to RMB0.60/cu m in 2H17 and then remain a stable margin of RMB0.63/cu m going forward thanks to its forthcoming long-term contracted LNG import (1.4mtpa) in 2H18. The contracted LNG price is about 8% below Zhejiang’s city-gate price. Meanwhile, with a 50% spare capacity, the company may source more spot LNG during winter peak season, which can be potentially 64% lower than domestic LNG prices based on international and domestic prices in this winter (avg. Japan LNG import price: US$8.0/mmbtu vs domestic LNG price: RMB6,778/ton during Nov 17-Jan 18). Cost advantage will help ENN Energy maintain its dollar margin and market share. 

Reiterate BUY and TP at HK$66.0 

The counter is trading at 2018E PE of 12.5x on 18.9% FY17-19E EPS CAGR, the cheapest among peers. We reiterate our BUY rating and TP

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