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Guanghui Energy (600256): Signing LNG purchase and sale agreement, business development is more stable

Guanghui Energy (600256): Signing LNG purchase and sale agreement, business development is more stable

Event: Subsidiary Guanghui International Trade Co., Ltd. and Total Corporation signed the “LNG Purchase and Sale Agreement”. The amount of LNG purchased and sold was about 70 tons / year, and the supply cycle was 10 years.

Comments: 1.

Long association provides protection for the amount of LNG turnover According to the company’s historical announcement, the company gradually only reached an agreement with Shell’s strategic framework, stipulating that “Shell’s related parties have the right to supply 1 million tons of joint ventures annually with competitive terms and conditions on a regular contract basis.Left and right LNG is used as the initial import supply for project operations.

Any additional LNG import demand for a term contract that exceeds the deadline is imported by the 深圳桑拿网 joint venture independently, but Shell’s related parties have the right of priority supply under the same conditions.

In 2018, the company’s receiving station received and unloaded LNG85.

34 Initially, LNG was mainly imported by combining the Shell agreement with the spot.

With the expansion of the company’s receiving station scale, after the second phase of the project’s successful commissioning, the design turnover capacity has reached 115, and the actual turnover capacity is expected to be higher. Therefore, Shell’s agreement alone cannot meet the company’s business needs.Total signed the long-term association in the early 70s will be an important guarantee for the future LNG turnover.

2.

According to IGU statistics, most LNG prices in the Asia-Pacific region are directly linked to oil prices.

The long-term contract 南京桑拿论坛 price formula mostly adopts the S-curve method, and generally sets upper and lower limits, which can effectively prevent the risk of oil prices from rising and falling sharply.

In addition, the spot price of LNG is mainly affected by supply and demand. When heating demand is strong in winter, the increase in import volume will lead to an increase in the spot price of LNG imports. At this time, the price of the Long Association is more favorable.

Therefore, the short-term long-term association can enable the company to flexibly control the cost of imports and effectively prevent the risk of import price fluctuations.

3.

The long-term plan of the company ‘s natural gas business is based on the long-term planning of the company ‘s receiving station. The third phase of the project is expected to start production in 2020. At that time, the design turnover will reach 300 tons, and some imported LNG will enter the Jiangsu pipeline network for sales.Necessary conditions for stable business development.

The multi-supplier and multi-contract approach can prevent the risk of excessive reliance on a single importer to a certain extent, which meets the company’s need for the steady development of its natural gas business.

Estimated net profit for 2019-202126.

36/38.

04/43.

470,000 yuan, EPS is 0.

39/0.

56/0.

64 yuan / share, corresponding to PE at 12/8/7 times. Maintain “Buy” rating.

Risk Warning: Import LNG Price Rise, Contract Default Risk