01193 Overview

Brent Oil Price Fluctuation: Brent oil prices dropped after reaching USD 117 per barrel, influenced by President Trump's comments on the potential end of the Iran war.

Sector Risk-Reward Profile: The crisis in the Hormuz Strait has altered the risk-reward dynamics in the oil and gas sector, with expectations of sustained high prices.

Daiwa's Sector Picks: Daiwa recommends ENN ENERGY and NEWAY as top picks in the oil and gas sector despite the current volatility.

Cautious Outlook on Gas Stocks: Daiwa expresses caution regarding city gas stocks due to rising natural gas prices, predicting that companies with high liquefied natural gas exposure may face significant losses.

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.

Offshore Wind Turbine Procurement: China's offshore wind turbine procurement capacity reached 8.42 gigawatts last year, with MINGYANG SMART ENERGY leading at 2.1 gigawatts and GOLDWIND at 1.2 gigawatts, driven by positive market sentiment.

Stock Recommendations: JPMorgan recommends focusing on companies with strong earnings growth, such as ORIENT WIRES & CABLES, DAQO New Energy, and GCL TECH, while the A-share photovoltaic industry index has outperformed the market.

Energy Storage Growth: China's installed capacity of energy storage systems surged by 73% year-on-year, with SUNGROW POWER expected to benefit from policy reforms and increased demand in high-end markets.

Cautious Outlook on Gas Utilities: JPMorgan maintains a cautious view on China's gas utilities sector due to weak growth and profit margins, with KUNLUN ENERGY identified as a top pick, while CHINA RES GAS faces challenges with slow share buybacks and weak operating trends.

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.

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.

Share Buybacks: CHINA RES GAS initiated share buybacks on November 20 and 21, repurchasing a total of 1.77 million shares, which is approximately 0.08% of its issued shares, though the reasons for the buybacks remain unclear.

Natural Gas Sales Performance: The company's natural gas sales saw a slight increase of 0.6% year-on-year for the first ten months of 2025, with industrial gas volume rebounding due to colder weather, while commercial gas volume experienced a decline of 3% year-on-year.

Analyst Rating and Target Price: BofA Securities raised its target price for CHINA RES GAS from $21 to $22.5, maintaining a Neutral rating due to high valuation, but noted a 4.6% dividend yield and buyback returns could support the stock price.

Market Context: The stock is currently facing short selling pressures, with a short selling ratio of 24.748% and a total short selling value of $37.33 million as of November 25, 2025.