Shaanxi Natural Gas (002267) 2018 Annual Report Review: Adjustment of Pipeline Transportation Expenses Landed Achieved Steady Growth

Shaanxi Natural Gas (002267) 2018 Annual Report Review: Adjustment of Pipeline Transportation Expenses Landed Achieved Steady Growth
Event: Shaanxi Natural Gas 青岛夜网 released its 2018 annual report.In 2018, the company’s operating income was 90.0 million yuan, an increase of 17 in ten years.8%; net profit attributable to mother 4.0 ppm, a 10-year increase of 2.2%; EPS 0.36 yuan.The company issued a dividend plan, and plans to issue 0 cash dividends.1 yuan (including tax). Benefiting from the strong demand for natural gas, the growth rate of gas sales is considerable: the company’s core business is long-distance pipelines and city gas businesses.Benefiting from the strong demand for natural gas, the company’s natural gas sales volume in 2018 was 61.0 billion cubic meters, an increase of 9 in ten years.2%.In terms of business, in 2018 the company’s provincial pipeline transportation and city gas sales volume were 57.2, 3.800 million cubic meters, an increase of 8 each year.2%, 27.0%. Settlement of price disputes and adjustment of pipeline transportation fees: The company’s annual report shows that the price disputes between the company and upstream suppliers have been resolved in 2018, and the estimated cost of the previous period is about 1.600 million.In addition, through the acceleration of natural gas price reform, Shaanxi Province re-approved and adjusted the price of natural gas pipeline transportation in June 2018.We believe that the implementation of the adjustment of the natural gas pipeline transportation fee will attenuate the market’s shift to the company’s pipeline transportation fee fluctuation.The company’s gross profit margin was 10 in 2018 due to a combination of factors such as the increase in sales of natural gas, rescheduled estimated costs, and adjustment of pipeline transportation fees.7%, an annual increase of 0.4 units; net interest rate 4.6%, reduced by 0 every year.7 units; net profit attributable to mother 4.0 million yuan, an increase of about 0 in ten years.10,000 yuan (+2.2%). Exploit the market and cultivate profit growth points: In addition to deepening the domestic pipeline transportation business in the province, the company has expanded its market development efforts since 2018.According to the company’s annual report, the company successfully acquired 100% equity of Wuqi Baoze Natural Gas Company and invested across provinces to establish Heilongjiang Natural Gas Pipeline Network Co., Ltd. (20% stake) and Qinjin Gas Co., Ltd. (49% stake).It is expected that the above projects will contribute to the increase in performance. Earnings forecast and investment rating: According to the company’s operating conditions, the profit forecasts for 2019 and 2020 are lowered. It is expected that the company’s attributable net profit for 2019 and 2020 will be 4.1,5.300 million (5 before adjustment respectively.0, 5.9 ‰), plus the predicted net profit for motherhood in 2021 of 6.300 million.Expected company 2019?The EPS in 2021 is 0.37, 0.48, 0.56 yuan, the current sustainable corresponding PE is 23, 18, 15 times.We are optimistic about the development of the company’s pipeline gas business and maintain the “overweight” rating. Risk reminder: the risk of rising natural gas purchase prices, the company’s natural gas supply exceeds expectations, downside risks of increased natural gas pipeline transportation fees and distribution fees, downstream natural gas demand exceeds expectations, and the company’s natural gas pipeline construction progress gradually exceeds expectations.