【出版时间及名称】：2009年11月中国天然气行业研究报告
        【作者】：瑞士信贷
        【文件格式】：pdf
        【页数】：56
        【目录或简介】：
Entering the harvesting stage
New projects are harder to come by, so assessing the potential of existing projects is key.
We map all of CGH’s and Xinao’s projects based on a framework that includes
affordability, penetration potential and gas pipeline access. This will in turn drive our DCF.
From supply bottlenecks to “surplus”
The gas availability is set to grow with the development of new supply sources (domestic
and imports) and the completion of transmission infrastructure. We see a 14% CAGR for
gas supply (2008-15) or incremental 146 bcm of gas by 2015E. This is positive for the
sector and is a view shared by the market.
An additional positive is our view on demand. Our demand model, benchmarked to
consumption patterns in the developed markets (e.g. Japan, Korea, etc), suggests that
demand may not keep pace with supply by 2015, as a “surplus” develops. This is not
oversupply per se, but has implications on the type of use (e.g. power) and the price point.
Overall, such a scenario is positive for the sector as it 1) encourages development of new
usages within projects (CNG and heating), 2) improves the market positioning vis-à-vis the
wholesalers, and 3) allows gas penetration into smaller or marginal markets.
We also highlight other favourable industry dynamics like governmental policy direction,
pricing policy (automatic gas tariff pass-through) and transmission gas pipeline build-out.
Location, location, location
As supply ramps up, connectivity will be prioritised into the markets that have the best
affordability and off-take potential. We took a deep dive into 286 Chinese prefectures’
income and gas penetration levels and found large pockets with high affordability and low
penetration. These are the HV (high value) markets that distributors want to get access to.
Mapping the footprints of Xinao and CGH, we estimate that 50% of Xinao’s 75 projects
and 40% of CGH’s 105 projects fall in this category in terms of urban population coverage.
Taking into account projects in certain HV markets (like Fujian) whose gas transmission
connectivity comes at a later stage, we adjust our gas penetration increase accordingly.
We assume penetration increases of ~5% and ~2.2% per annum in 2009-12E (CY), and
volume CAGRs of 16% and 42% for Xinao and CGH, respectively. CGH’s penetration is
lower given it has 28 projects in Fujian, but gas volume growth is higher given the low
base effect as its network build will be completed gradually in the next one to two years.
Combination of growth and FCF
China gas utilities trade at FY10E EV/EBITDA of 12.3x against developed market gas
utilities’ average of 6.5x. Average two-year EBITDA CAGR is 24% versus 4% for the
developed markets. Favourable industry dynamics support growth beyond 2011E.
CGH trades at FY11E (March YE) of 20.3x, in line with local peers and imply 0.37x PEG.
We expect FY10-13 EPS CAGR of 55%. Our target price of HK$4.25 (implying 26%
upside) is based on the average of DCF value (HK$4.13) and PEG of 0.48x as the market
is likely to focus on significant growth from the early cycle penetration increase. Key risks
are execution and share option dilution (~15%). Our target price is on a fully diluted basis.
Xinao trades on FY10E EV/EBITDA of 9.6x and P/E of 15.4x, at a 10-15% discount to its
local peer group. While it does not have dramatic early stage penetration growth and
parent asset injection angle of some of its peers, it remains one of the bellwether gas
distributors. We believe the discount is unwarranted as it enters the harvesting stage with
rising FCF. Key risk is penetration growth as connection fee still accounts for 55% of
EBITDA. Our DCF already assumes a fall in new connections after 2012E.