New Natural Gas (603393) 2018 Annual Report Comments: Asian and American Energy Consolidated Contribution Significantly Optimizes Upstream Business

New Natural Gas (603393) 2018 Annual Report Comments: Asian and American Energy Consolidated Contribution Significantly Optimizes Upstream Business

Event: New Natural Gas released its 2018 annual report.

In 2018, the company realized operating income16.

3 ‰, an increase of 60 in ten years.

6%; net profit attributable to 佛山桑拿网 mother 3.

30,000 yuan, an annual increase of 26.

9%; earnings per share 2.

09 yuan.

The company disclosed the dividend distribution plan, and distributed 10 yuan (including tax) for every 10 shares and increased 4 shares.

Downstream business is steadily advancing: Benefiting from strong natural gas demand, the company’s Xinjiang regional natural gas sales volume in 20186.

5 billion cubic meters, an increase of 17 in ten years.

8%; gross profit of natural gas supply business increased by 13 in ten years.


Affected by factors such as upstream price increases, the company’s natural gas supply business gross margin in 2018 was 26.

5%, ten-year average 1.

4 units.

In addition, the company’s natural gas connection business has developed steadily, with user installations completed in 20183.

10,000 households, the gross profit of this business increased by 11 every year.


Layout of upstream business, Asia-American Energy and consolidated contribution to performance increase: In 2018, the company successfully acquired the coal-bed gas company Asia-American Energy (2688.

Hong Kong) 50.

5% equity, layout upstream business.

Finally, at the end of 2018, due to exercise substitution, the company held Asian American Energy 49.

93% equity.

Asian American Energy consolidated on August 31, 2018. We estimate that Asian American Energy’s 2018 consolidated performance was 0.

90,000 yuan, accounting for 25% of the company’s net profit attributable to the mother.


Affected by factors such as the consolidation of Asian and American Energy, the company’s 2018Q4 net profit2.

1 ‰, with a previous growth rate of 90%, effectively boosting expected performance.

Optimistic about the development of coalbed methane business: With the rapid growth of downstream natural gas demand, a series of natural gas supply and supply tend to tighten, and the upstream price of natural gas has also increased.

As an unconventional natural gas source, coalbed methane will supplement conventional natural gas supply.

With the advancement of Asia-American Energy Panzhuang and the Mabi Blockchain Project, the company’s coalbed methane business has achieved a “volume and price rise”, which has become the core growth point of the company’s future performance.

Profit forecast and investment rating: Taking into account changes in the company’s operating conditions, the profit forecasts for 2019 and 2020 are lowered. It is expected that the company’s net profit attributable to mothers in 2019 and 2020 will be 4 respectively.

400 million, 5.

6 ppm (original value 4).

600 million, 5.

$ 900 million, plus a forecast net profit of 2021 for mothers6.

9.3 billion.

We will not consider the impact of the dividend plan on the share capital for the time being. It is expected that the company’s EPS for 2019-2021 will be 2 respectively.73, 3.

48, 4.

33 yuan, corresponding PE is 15, 12, 9 times.

We are optimistic about the development of the company’s upstream business and maintain a “Buy” rating.

Risk reminder: The sales volume of natural gas is lower than expected, the number of new users’ connection is reduced or the connection cost is reduced, the gas purchase cost exceeds the expected growth, and the gas distribution fee is further down.The risks of change, the cost control effect during the period is less than expected.