CICC Lowers Earnings Outlook for CHINA GAS HOLD (00384.HK), Maintains Outperform Rating
Financial Performance: CHINA GAS HOLD reported a 2% year-on-year drop in revenue and a 24% fall in net profit for the first half of the fiscal year ending September 2025, missing broker expectations.
Impact of Connection Business: The decline in new residential connections negatively affected revenue and the operating profit margin of the connection business, leading to a forecast reduction in net profit for FY2026 and FY2027.
Dividend Announcement: The company declared an interim dividend per share of HKD15 cents, remaining flat compared to the previous year.
Broker Outlook: Despite the challenges, HSBC Research maintains an Outperform rating on the stock, citing improving cash flow and potential for stable dividends, with a target price set at HKD10.
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UBS Raises Target Price for CHINA GAS HOLD to HKD 8.9, Anticipates 7% Dividend Yield
UBS Rating and Target Price: UBS maintains a Buy rating on CHINA GAS HOLD (00384.HK) and raises its target price from HKD8.2 to HKD8.9, citing a strong dividend yield of 7% that surpasses the industry average of 4-5%.
Dividend Sustainability: The broker anticipates that CHINA GAS HOLD can sustain a dividend per share of HKD0.5 for the fiscal year ending March 2026, providing downside support despite weak fundamentals.
Daiwa's Ratings and Target Prices for Gas Stocks (Table)
Stock Performance: HK & China Gas remains stable with no change in share price, while China Res Gas has seen a slight decline of 0.120 (-0.560%).
Short Selling Data: Significant short selling activity is noted across the companies, with HK & China Gas at $29.80M (28.257% ratio) and China Res Gas at $42.00M (35.576% ratio).
Analyst Ratings: HK & China Gas has been upgraded from "Hold" to "Outperform" with a target price increase from 7.1 to 7.7, while China Gas Hold maintains an "Outperform" rating with a target of 8.3.
Market Outlook: Daiwa has upgraded its view on the CN natural gas sector to "Neutral," expecting improved fundamentals in 2026.
Daiwa Raises CN Gas Industry Rating to Neutral and Upgrades HK & China Gas to Outperform
Natural Gas Demand Outlook: Daiwa predicts a rebound in natural gas demand this year, but a mild winter in China may limit heating demand growth due to temperature fluctuations.
Market Competition: Increased competition among urban gas suppliers is expected as they offer discounts to attract industrial clients, although a mild winter should prevent gas supply shortages and limit profit risks for gas companies in mainland China and Hong Kong.
Sector Rating Upgrade: Daiwa has upgraded the rating of the Chinese gas utility sector from Negative to Neutral, favoring high-dividend stocks such as CHINA GAS HOLD and HK & CHINA GAS.
Stock Performance: HK & CHINA GAS' rating has been upgraded from Hold to Outperform, with a target price increase from HKD7.1 to HKD7.7.
Daiwa Revises Outlook for China's Natural Gas Sector to Neutral, Expects Better Fundamentals by 2026
Daiwa's Industry Outlook: Daiwa has upgraded its view on China's natural gas industry to Neutral, anticipating improvements in company fundamentals by 2026.
Sales Volume Growth: The firm estimates that major Chinese natural gas companies will see low- to mid-single-digit growth in sales volume compared to last year's low base.
Stock Selection Preferences: Daiwa favors high-yield stocks, specifically highlighting CHINA GAS HOLD (00384.HK) and HK & CHINA GAS (00003.HK) for investment.
Target Price Adjustments: CHINA GAS HOLD's rating has been upgraded to Outperform with a target price of HKD8.3, while HK & CHINA GAS has a target price of HKD7.7 due to potential business improvements.
JPM: ENN ENERGY's Privatization Plan Delayed; KUNLUN ENERGY Recommended for Focus
ENN Energy Privatization Delay: ENN Energy has extended the deadline for dispatching its privatization scheme document to no later than January 30, 2026, due to the need for more time to meet pre-conditions, which was anticipated by the market.
Impact on Share Prices: JPMorgan believes the delay in ENN Energy's privatization scheme may have a slight negative effect on its share price, while its H-shares are viewed as offering better risk-return compared to A-shares.
China Gas Hold Performance: China Gas Hold reported a 24.2% decline in interim net profit for 1HFY2026, with weak operational indicators, but is expected to see a gradual recovery in gas sales over the next few months.
Market Opportunities: JPMorgan suggests that investors consider market entry opportunities in KUNLUN Energy, which is projected to achieve over 5% sales growth in 2H25, alongside improvements in gas sales for other companies like China Resources Gas.
CICC Lowers Earnings Outlook for CHINA GAS HOLD (00384.HK), Maintains Outperform Rating
Financial Performance: CHINA GAS HOLD reported a 2% year-on-year drop in revenue and a 24% fall in net profit for the first half of the fiscal year ending September 2025, missing broker expectations.
Impact of Connection Business: The decline in new residential connections negatively affected revenue and the operating profit margin of the connection business, leading to a forecast reduction in net profit for FY2026 and FY2027.
Dividend Announcement: The company declared an interim dividend per share of HKD15 cents, remaining flat compared to the previous year.
Broker Outlook: Despite the challenges, HSBC Research maintains an Outperform rating on the stock, citing improving cash flow and potential for stable dividends, with a target price set at HKD10.
UBS Raises Target Price for CHINA GAS HOLD to HKD 8.9, Anticipates 7% Dividend Yield
UBS Rating and Target Price: UBS maintains a Buy rating on CHINA GAS HOLD (00384.HK) and raises its target price from HKD8.2 to HKD8.9, citing a strong dividend yield of 7% that surpasses the industry average of 4-5%.
Dividend Sustainability: The broker anticipates that CHINA GAS HOLD can sustain a dividend per share of HKD0.5 for the fiscal year ending March 2026, providing downside support despite weak fundamentals.
Daiwa's Ratings and Target Prices for Gas Stocks (Table)
Stock Performance: HK & China Gas remains stable with no change in share price, while China Res Gas has seen a slight decline of 0.120 (-0.560%).
Short Selling Data: Significant short selling activity is noted across the companies, with HK & China Gas at $29.80M (28.257% ratio) and China Res Gas at $42.00M (35.576% ratio).
Analyst Ratings: HK & China Gas has been upgraded from "Hold" to "Outperform" with a target price increase from 7.1 to 7.7, while China Gas Hold maintains an "Outperform" rating with a target of 8.3.
Market Outlook: Daiwa has upgraded its view on the CN natural gas sector to "Neutral," expecting improved fundamentals in 2026.
Daiwa Raises CN Gas Industry Rating to Neutral and Upgrades HK & China Gas to Outperform
Natural Gas Demand Outlook: Daiwa predicts a rebound in natural gas demand this year, but a mild winter in China may limit heating demand growth due to temperature fluctuations.
Market Competition: Increased competition among urban gas suppliers is expected as they offer discounts to attract industrial clients, although a mild winter should prevent gas supply shortages and limit profit risks for gas companies in mainland China and Hong Kong.
Sector Rating Upgrade: Daiwa has upgraded the rating of the Chinese gas utility sector from Negative to Neutral, favoring high-dividend stocks such as CHINA GAS HOLD and HK & CHINA GAS.
Stock Performance: HK & CHINA GAS' rating has been upgraded from Hold to Outperform, with a target price increase from HKD7.1 to HKD7.7.
Daiwa Revises Outlook for China's Natural Gas Sector to Neutral, Expects Better Fundamentals by 2026
Daiwa's Industry Outlook: Daiwa has upgraded its view on China's natural gas industry to Neutral, anticipating improvements in company fundamentals by 2026.
Sales Volume Growth: The firm estimates that major Chinese natural gas companies will see low- to mid-single-digit growth in sales volume compared to last year's low base.
Stock Selection Preferences: Daiwa favors high-yield stocks, specifically highlighting CHINA GAS HOLD (00384.HK) and HK & CHINA GAS (00003.HK) for investment.
Target Price Adjustments: CHINA GAS HOLD's rating has been upgraded to Outperform with a target price of HKD8.3, while HK & CHINA GAS has a target price of HKD7.7 due to potential business improvements.
JPM: ENN ENERGY's Privatization Plan Delayed; KUNLUN ENERGY Recommended for Focus
ENN Energy Privatization Delay: ENN Energy has extended the deadline for dispatching its privatization scheme document to no later than January 30, 2026, due to the need for more time to meet pre-conditions, which was anticipated by the market.
Impact on Share Prices: JPMorgan believes the delay in ENN Energy's privatization scheme may have a slight negative effect on its share price, while its H-shares are viewed as offering better risk-return compared to A-shares.
China Gas Hold Performance: China Gas Hold reported a 24.2% decline in interim net profit for 1HFY2026, with weak operational indicators, but is expected to see a gradual recovery in gas sales over the next few months.
Market Opportunities: JPMorgan suggests that investors consider market entry opportunities in KUNLUN Energy, which is projected to achieve over 5% sales growth in 2H25, alongside improvements in gas sales for other companies like China Resources Gas.
CICC Lowers Earnings Outlook for CHINA GAS HOLD (00384.HK), Maintains Outperform Rating
Financial Performance: CHINA GAS HOLD reported a 2% year-on-year drop in revenue and a 24% fall in net profit for the first half of the fiscal year ending September 2025, missing broker expectations.
Impact of Connection Business: The decline in new residential connections negatively affected revenue and the operating profit margin of the connection business, leading to a forecast reduction in net profit for FY2026 and FY2027.
Dividend Announcement: The company declared an interim dividend per share of HKD15 cents, remaining flat compared to the previous year.
Broker Outlook: Despite the challenges, HSBC Research maintains an Outperform rating on the stock, citing improving cash flow and potential for stable dividends, with a target price set at HKD10.
