00384 Overview

Stock Performance: Several Hong Kong gas companies experienced declines in share prices, with China Gas Holdings down 1.34% and China Resources Gas down 2.44%.

Short Selling Activity: Notable short selling activity was reported, with China Gas Holdings having a short selling ratio of 26.606% and HK & China Gas at 23.762%.

Analyst Ratings: ENN Energy received an "Overweight" rating with a target price increase from 66.5 to 72.5, while HK & China Gas was downgraded from "Overweight" to "Neutral".

Market Updates: Kunlun Energy saw a slight increase in share price, while Jefferies upgraded HKEX to "Buy" and raised target prices for BEA and BOCHK.

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.

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.

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'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.

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.