Huatai Securities: optimistic about the diversified leading shares of energy sources, sharing the dividend of demand transfer, and profiting from the volatility of LNG logistics and warehousing.

Huatai Securities pointed out that at the end of February 2026, the Middle East conflict erupted, the Strait of Hormuz was effectively blocked, and the Ras Laffan Industrial City LNG facility in Qatar was attacked, posing the most severe impact on China's LNG imports since 2017. The market generally expects this interruption to have a uniform impact on the gas and power sectors, but Huatai Securities believes that the impact presents a mismatched pattern of "more pronounced in the north and lighter in the south, with state-owned enterprises bearing the brunt more than private enterprises", and will catalyze a structural restructuring of China's natural gas import pattern in the next 3-5 years. Different provinces will be affected differently due to variations in the proportion of Qatari LNG imports. From the perspective of the industrial chain, city gas traders holding low-cost HH-indexed long-term contracts are expected to be the biggest beneficiaries, with resale gross margins exceeding $10/MMBtu; while gas and power enterprises face the dual pressure of fuel costs exceeding the breakeven point due to "quantity and price". Bullish on the transfer of demand dividend among diversified sources of gas, and benefiting from LNG logistics and warehousing from volatility.