New Stock Preview | With a market value of over one trillion, ENN Natural Gas is once again making a splash in the Hong Kong stock market.

China's largest private natural gas supplier, ENN Natural Gas, with a scale of over one trillion, after submitting the application for the second time, can it achieve the dual listing status of "A+H" as desired? It is understood that ENN Natural Gas recently submitted its second application for listing on the main board of the Hong Kong Stock Exchange, with CICC as its sole sponsor. The company deepens its layout in the natural gas industry chain. According to Frost & Sullivan, based on retail gas volume, the company will be China's largest private urban gas enterprise in 2024. In addition, based on total gas sales volume, it is also the largest private natural gas enterprise in China, with a market share of 9.2%. The company is listed on the A-share market, and its stock price has shown a long-term bullish trend, continuing to rise over the past seven years, doubling its market value. This year, influenced by information such as the privatization of ENN ENERGY and the listing in Hong Kong, the stock price started to rise sharply at the end of October, with an increase of over 20%. However, ENN Natural Gas has shown weak performance in recent years. From 2022 to the first half of 2025, the revenue was 146.113 billion yuan, 137.841 billion yuan, 131.715 billion yuan, and 64.489 billion yuan, respectively. The net profit was 10.042 billion yuan, 10.638 billion yuan, 9.73 billion yuan, and 4.395 billion yuan, respectively. Both revenue and profits have shown a downward trend overall. As of October 2025, the company's cash and cash equivalents amounted to 12.419 billion yuan. Stable performance, steady profit It is understood that ENN Natural Gas is based on natural gas full-scene as its foundation, covering the entire industry chain, including upstream gas sources (domestic and overseas gas sources), midstream storage and peak regulation (gas storage equipment, LNG ships and pipelines), and downstream terminal applications (smart home business, natural gas business, pan-energy business, and engineering installation). The company has accumulated over 30 years of operational experience and has a large customer base, with over 32 million residential users and over 290,000 commercial users. From a business perspective, the core source of income comes from natural gas sales business, accounting for a stable revenue share. In the first half of 2025, the revenue share was 81%, with retail, wholesale, and platform trading gas revenue shares respectively at 52.2%, 21.4%, and 7.4%, all maintaining high stability. In addition, other sectors' revenues also remained relatively stable, with fluctuations in the range of 2-3 percentage points. Revenue shares for pan-energy business, smart home business, and engineering construction and installation were 10.8%, 3.2%, and 3.4% respectively. The company provides natural gas to customers in various forms, including PNG, LNG, and CNG. Under the retail model, customers include residential users, commercial users, and vehicle gas stations. Commercial users are the main source of demand, accounting for 79.25% of sales in the first half of 2025, while residential users accounted for 19.8%. The main markets are in East China, South China, and Southwest China, accounting for 57.7%, 19%, and 23% respectively. Retail sales volume and prices are relatively stable, with minimal fluctuations in this business income. Wholesale natural gas sales have more significant fluctuations, with a growth of 26.7% in the first half of this year, far ahead of other channels, accounting for 26.2% of total sales, but prices have declined significantly, at 2.95 yuan per cubic meter in the first half of this year, a 6.3% drop year-on-year, and a 41.2% drop compared to 2022. The fluctuations in quantity and price offset each other, resulting in overall stable wholesale income. Platform trading gas mainly involves selling natural gas to non-residential users domestically and internationally, with a surge in demand in 2023, but slowing down thereafter, accounting for 15% of sales in the first half of this year. Other businesses involve non-core activities for the company but also have growth potential, such as the company's provided pan-energy solutions, including optimization, replacement, and/or construction of related energy systems or equipment, such as photovoltaic installations, energy storage stations, and steam supply facilities. The main customers are parks, factories, and commercial buildings, with specific cases such as the pan-energy projects in Guangdong Dongguan Park and Anhui Fuyang Park. This business's revenue growth is considerable, with revenue contributions increasing to 10.8%. ENN Natural Gas has a wide distribution of customers. From 2022 to the first half of 2025, the top five customers' revenue contributions were 11.0%, 6.0%, 4.5%, and 4.8% respectively, while supplier concentration was slightly higher, with procurement amounts accounting for 33.8%, 32.2%, 36.0%, and 39.6% during the same period. However, with the company's pricing strategy and long-term relationships with suppliers, the company's gross profit margin remains relatively stable, persisting between 13% and 14%, standing at 14.2% in the first half of 2025. Benefiting from economies of scale, the company has maintained stable expenses, with sales expense ratios at 1%-1.2%, management expense ratios at 2.8%-3.3%, and financial expense ratios at 0.7%-1%. From 2022 to the first half of 2025, the company's net profit margins were 6.9%, 7.7%, 7.4%, and 6.8%, respectively. The company's debt ratio is below 50%, with no high leverage, but its return on equity is higher than the industry average, exceeding 14.5% on an annualized basis in 2025. Outstanding competitiveness, striving for "A+H" dual listing status Natural gas is a fossil fuel, but it is highly valued for its higher cleanliness, efficiency, and adaptability. In terms of consumption, according to Frost & Sullivan, global natural gas sales volume in 2024 was 42.12 trillion cubic meters, with a compound annual growth rate of 2.5% over the past five years. China is the third largest natural gas consumer in the world, with its consumption accounting for 10.1% of the global total in 2024. China's natural gas consumption has maintained single-digit compound growth. Natural gas accounted for 9.2% of China's energy structure in 2024, and with the advancement of the "dual-carbon" target, it is expected to reach 11.7% by 2030. In terms of supply, China's natural gas production in 2024 was 246.4 billion cubic meters, accounting for 5.88% of the global total, which is significantly lower than consumption. Therefore, there is still a need for a large amount of imports, with domestic production and imports accounting for 57.6% and 42.4%, respectively, of the total supply. It is estimated that China's total natural gas supply will reach around 604.8 billion cubic meters by 2030, a 1.45 times increase compared to 2024. To reduce dependence on imports, this may bring about substitution opportunities for domestic suppliers. It is worth noting that ENN Natural Gas's revenue mainly comes from domestic sources, with the mainland China revenue accounting for 95.2% in the first half of 2025, and the company is in a leading position among domestic private natural gas suppliers. The natural gas industry has a high concentration level, with Frost & Sullivan reporting that by the end of 2024, Chinese companies had signed overseas LNG long-term contracts totaling over 120.0 million tons, with the top four companies accounting for 81.8% of the total market share, of which the top three are state-owned enterprises, accounting for 73.3%. ENN Natural Gas ranks fourth with an 8.5% share, making it the largest private natural gas supplier in China. Additionally, in terms of retail gas volume, the top five city gas companies in China held a market share of 31.7% in 2024, with the company holding a 6.2% share, ranking third. ENN Natural Gas has outstanding competitiveness among private natural gas suppliers, but the majority of the market share is held by state-owned enterprises. With a scale of over one trillion, increasing market share poses a significant challenge. However, the company has operational resilience, with relatively stable retail and wholesale gas sales, strong business cash flow, generating over 13 billion yuan net cash flow on average over the past three years, with 5.403 billion yuan in the first half of 2025, providing ample cash flow for capital expenditures. Overall, as China's largest private natural gas enterprise, ENN Natural Gas has stable performance. Due to its large scale and the relatively low growth rate of industry demand, its growth potential is slightly lacking. However, it holds the highest market share among domestic private natural gas suppliers and has outstanding competitiveness, which may benefit from the development dividends brought about by the "dual-carbon" target. Additionally, the company's profitability is relatively stable, with strong business cash flow and high shareholder returns. This second application submission fully demonstrates ENN Natural Gas's determination to list in Hong Kong and achieve dual "A+H" listing status. The company may ramp up its overseas business, enhance global competitiveness, and explore growth opportunities.