CICC released the latest research report of Tian Lun Gas (01600), maintaining the company’s "Outperform Industry" rating and delivering the target price of HK$10.0. CICC believes that Zhuhai Port’s invest in Tian Lun Gas will bring about continuous synergies, which will help Tian Lun Gas’s working along the business with urban and rural areas, and the future strategic direction of the common development of traditional energy and new energy.

CICC mentioned that Zhuhai Port is a subsidiary of Zhuhai State-owned Assets Supervision and Administration Commission, and in recent years it has continued to develop new energy layouts including natural gas, photovoltaics, wind power and other fields (such as the acquisition of Xiuqiang shares focusing on photovoltaic glass and BIPV this year), and in Zhuhai operates city gas projects locally, and Zhuhai Port’s shareholding is positive for Tian Lun Gas. In response to the recent heavy rainfall incident in Henan, CICC believes that although Tian Lun Gas is based in Henan, the rainfall incident has not affected the company’s projects and gas supply, and operations remain as usual without interruption.

CICC said that the company’s FY20 Environmental, Social and Governance (ESG) report has continued to improve in various indicators, which is expected to lead to continuous improvement in valuation. The report shows that the company’s operations and distribution of natural gas totaled 2.28 billion cubic meters, which is equivalent to replacing about 3.0327 million tons of standard coal consumption; the company’s own energy consumption density is 6.76 MWh/million RMB revenue, which is 9.91 MWh compared to the previous year /Million RMB revenue has dropped significantly, significantly lower than the evaluation level of listed companies in the same industry; greenhouse gas emission density 3.5 tons of carbon dioxide / million RMB revenue (compared to 5.74 tons of carbon dioxide / million RMB in FY19 and 8.01 tons of carbon dioxide / million RMB in FY18 Decrease), which is also lower than the average level of listed companies in the same industry.

CICC expects 1H21 high gas volume growth to be a bright spot, with a year-on-year growth of more than 30%, exceeding the industry average. Among them, the growth of endogenous gas volume is close to 20%. The three newly acquired projects Jingyuan, Chase and Mutual Assistance are expected to bring more than 10% The growth rate.

  Source: Zhitongcaijing