Core Viewpoint - DBS reported that China Resources Gas (01193) experienced a 30.5% year-on-year decline in net profit for the first half of the year, falling short of expectations, primarily due to weak new connection volumes and sluggish comprehensive service operations [1] Financial Performance - The company's net profit dropped by 30.5% year-on-year, indicating significant underperformance against market expectations [1] - The forecast for comprehensive service revenue is expected to show negative growth as the company adjusts its development strategy [1] Market Conditions - The ongoing sluggish real estate market continues to suppress new connection demand, impacting overall performance [1] Earnings Forecast - Earnings forecasts for 2025 and 2026 have been revised downwards by 6% and 12% respectively, reflecting a cautious outlook [1] Investment Rating - Based on a prudent outlook, the rating is maintained at "Hold," with the target price adjusted from HKD 24.3 to HKD 20.5 [1] - The stock is still considered to offer an attractive dividend yield of over 5% [1]

Core Viewpoint - DBS reported that China Resources Gas (01193) experienced a 30.5% year-on-year decline in net profit for the first half of the year, falling short of expectations, primarily due to weak new connection volumes and comprehensive service business [1] Financial Performance - The company's net profit decreased by 30.5% year-on-year, which was below market expectations [1] - The forecast for comprehensive service revenue is expected to show negative growth due to a strategic adjustment by the company and ongoing weakness in the real estate market, which continues to suppress new connection demand [1] Earnings Forecast - DBS has revised down its earnings forecasts for 2025 and 2026 by 6% and 12% respectively [1] Investment Rating - Based on a cautious outlook, DBS maintains a "Hold" rating and has lowered the target price from HKD 24.3 to HKD 20.5 [1] - The stock is still considered to provide an attractive dividend yield of over 5% [1]

Core Viewpoint - Daiwa's report indicates that China Resources Gas (01193) experienced a 30% year-on-year decline in net profit for the first half of the year, suggesting potential management issues as it underperformed compared to peers, which may lead investors to demand a higher risk premium [1] Financial Performance - The company reported a 30% decline in net profit year-on-year for the first half of the year [1] - As the last city gas company to announce its half-year results, the performance of China Resources Gas was notably weaker across almost all metrics compared to its industry peers [1] Analyst Adjustments - Daiwa has revised its earnings per share forecasts for the company downwards by 19% to 25% for the years 2025 to 2027 [1] - The target price for China Resources Gas has been lowered from HKD 19.9 to HKD 16 [1] - The rating for the company has been set to "Sell" [1]

Core Viewpoint - The report from Daiwa indicates that China Resources Gas (01193) experienced a 30% year-on-year decline in net profit for the first half of the year, suggesting potential management issues and leading to a demand for higher risk premiums from investors [1] Financial Performance - China Resources Gas reported a 30% decrease in net profit compared to the previous year [1] - The company is the last urban gas company to announce its half-year results, and its performance is below that of its peers in almost all aspects [1] Analyst Adjustments - Daiwa has revised its earnings per share forecasts for China Resources Gas downwards by 19% to 25% for the years 2025 to 2027 [1] - The target price for the company has been reduced from HKD 19.9 to HKD 16 [1] - The rating for China Resources Gas has been set to "Sell" [1]

Investment Rating - The report maintains an "Overweight" rating for the gas industry [1]. Core Insights - The report highlights a slight increase in raw gas demand leading to a minor rise in US gas prices, while European storage advancements have contributed to a decrease in gas prices [4][9]. - The overall supply-demand dynamics indicate a modest increase in raw gas demand, with US natural gas market prices rising by 3.3% week-on-week as of August 27, 2025 [16]. - The report emphasizes the ongoing integration of Jiufeng Energy and the gradual implementation of pricing reforms across the country, which are expected to enhance profitability and valuation recovery for city gas companies [35]. Price Tracking - As of August 29, 2025, the week-on-week changes in gas prices are as follows: US HH +3.3%, European TTF -6.6%, East Asia JKM -2.9%, China LNG ex-factory price 0%, and China LNG CIF price -6.2% [9][14]. - The average total supply of natural gas in the US increased by 0.1% week-on-week to 1,127 billion cubic feet per day, while total demand decreased by 3.5% to 1,025 billion cubic feet per day [16]. Supply and Demand Analysis - The report notes that the storage pace in Europe is slower than expected, leading to a week-on-week decrease in European gas prices by 6.6% [17]. - In China, the apparent consumption of natural gas from January to July 2025 increased by 0.3% year-on-year to 246.1 billion cubic meters, attributed to warmer winter conditions affecting heating gas demand [22][27]. Pricing Progress - The report states that 65% of cities have implemented residential pricing reforms, with an average price increase of 0.21 yuan per cubic meter [35]. - The introduction of a new pricing mechanism for provincial natural gas pipeline transportation is expected to lower costs for downstream users and promote industry growth [35]. Investment Recommendations - The report recommends focusing on companies that can optimize costs and benefit from the ongoing pricing reforms, particularly highlighting New Energy, China Gas, and Kunlun Energy as key investment opportunities [4][35]. - It also suggests monitoring companies with quality long-term contracts and flexible scheduling capabilities, such as Jiufeng Energy and Xin'ao [4].

Core Viewpoint - China Resources Gas reported a decline in revenue and net profit for the first half of 2025, with revenue at HKD 49.785 billion, down 4.4% year-on-year, and net profit attributable to shareholders at HKD 2.403 billion, down 30.5%, which was below expectations [1] Group 1: Sales Performance - Retail natural gas sales volume for 1H25 was 20.76 billion cubic meters, a slight decrease of 0.69% year-on-year, with residential gas volume increasing by 4.2% while industrial and commercial gas volumes decreased by 2.2% and 2.6% respectively [2] - The sales gross margin reached HKD 0.55 per cubic meter, an increase of HKD 0.01 per cubic meter year-on-year, indicating a steady improvement in profitability despite the decline in industrial and commercial sales [2] - The company aims to further tap into the "urban village" transformation opportunities for residential user development and continue to actively develop industrial and commercial clients, with new users expected to contribute over 840 million cubic meters annually [2] Group 2: User Connection and Profitability - The number of new residential connection users decreased by 19.4% to 831,000, leading to a decline in connection segment profit to HKD 844 million, down 24.9% year-on-year [3] - Despite the decline in connection performance, the impact on overall profitability is manageable as the connection segment's contribution to total pre-tax profit has decreased to 19.4% [3] - The cumulative number of natural gas users reached 61.372 million, providing a solid foundation for the company's dual-service business growth [3] Group 3: Financial Health and Investor Returns - The company maintained a stable capital expenditure of HKD 2.45 billion in 1H25, with cash and bank deposits amounting to HKD 11.24 billion [4] - The debt financing cost decreased to 2.2%, leading to a 43.9% reduction in financial costs to HKD 310 million, indicating strong liquidity [4] - The company has repurchased 273,000 shares and plans to continue repurchasing over 45 million shares, while maintaining a minimum dividend payout of HKD 0.95 per share, resulting in a minimum dividend yield of 4.99% [4]

Core Viewpoint - The company's 1H25 performance met expectations, with a revenue of HKD 49.8 billion, down 4% YoY, and a net profit of HKD 2.403 billion, down 30% YoY, primarily due to a decline in connection numbers and comprehensive service revenue, leading to a decrease in gross profit margin [1] Financial Performance - 1H25 natural gas retail volume was 20.8 billion cubic meters, down 0.7% YoY, with commercial and industrial gas volumes affected by a warm winter, decreasing by 3% and 2% respectively [1] - Retail gas gross margin was HKD 0.55 per cubic meter, up HKD 0.01 YoY, with 831,000 new residential connections, down 19% YoY, and comprehensive service revenue of HKD 1.45 billion, down 18% YoY [1] Development Trends - The company adjusted multiple growth indicators for 2025, including gas volume growth (low single-digit growth vs. previous guidance of +4-5% YoY), connection numbers (2.1-2.2 million vs. previous 2.3-2.5 million), and comprehensive service revenue (mid-low single-digit growth vs. previous +20-30% YoY) [1] - Capital expenditure for acquisitions was adjusted to HKD 300 million for the year, down from HKD 500 million previously, while maintaining a gross margin growth guidance of HKD 0.01 per cubic meter to HKD 0.54 per cubic meter [1] Shareholder Returns - The company plans to enhance shareholder returns, with a guidance for total dividends in 2025 not to be lower than HKD 0.95 per share, implying a dividend yield of approximately 5% based on current stock price [2] - A stock buyback plan was announced for the end of 2024, with a scale of no less than 1.98% of total share capital, which is expected to further improve shareholder returns [2] Profit Forecast and Valuation - Due to ongoing pressure on connection numbers, the company has lowered its net profit forecasts for 2025 and 2026 by 8.2% and 10.2% to HKD 3.767 billion and HKD 4.110 billion respectively [2] - The current stock price corresponds to a P/E ratio of 11.7x for 2025 and 10.7x for 2026, with a target price adjustment down by 7.4% to HKD 25, reflecting a potential upside of 31.2% [2]

Investment Rating - The investment rating for the company is "Neutral" with a target price reduced to HKD 16.50, indicating a potential downside of 13.4% from the current price of HKD 19.05 [1][6][16]. Core Views - The company faced higher-than-expected operational pressures in the first half of the year, leading to a significant decline in net profit by 30.5% year-on-year, which was below market expectations [2][6]. - Despite the disappointing performance, the company increased its interim dividend by 20% to HKD 0.3 per share, indicating a commitment to shareholder returns [6]. - The company anticipates a rebound in retail gas sales and comprehensive service revenue in the second half of the year, with a projected 1.1% year-on-year increase in retail gas sales for 2025 [6][10]. Financial Overview - Revenue projections for the company are as follows: HKD 101,272 million in 2023, HKD 102,676 million in 2024, and HKD 102,403 million in 2025, reflecting a growth rate of 7.3% in 2023 but a decline of 0.3% in 2025 [3][18]. - Net profit is expected to decrease from HKD 5,224 million in 2023 to HKD 3,846 million in 2025, representing a year-on-year decline of 7.3% [3][18]. - The earnings per share (EPS) is projected to be HKD 1.79 in 2023, remaining flat in 2024, and decreasing to HKD 1.66 in 2025 [3][18]. Operational Data - The company reported a total revenue of HKD 49,785 million in the first half of 2025, down 4.4% year-on-year, with gas sales contributing HKD 44,298 million [7][8]. - The retail gas volume is projected to grow to 10,442 million cubic meters in 2025, with a slight increase in gross margin to RMB 0.55 per cubic meter [9][10]. - The number of new residential connections is expected to be adjusted down to 2.1 million for 2025, from an earlier estimate of 2.3 million [6][10].

Investment Rating - The report maintains a "Buy" rating for China Resources Gas (01193) [2][7]. Core Views - The company reported a 4.4% year-on-year decline in revenue for the first half of 2025, totaling HKD 49.785 billion, and a 30.5% decrease in net profit attributable to shareholders, amounting to HKD 2.403 billion, which was below expectations [7]. - The retail natural gas sales volume decreased by 0.69% year-on-year, with residential gas volume increasing by 4.2%, while industrial and commercial gas volumes fell by 2.2% and 2.6%, respectively [7]. - The company plans to pay an interim dividend of HKD 0.30 per share, an increase of HKD 0.05 per share compared to the previous year [7]. - The company is focusing on expanding its core city market and enhancing its gas sales margin, which has shown improvement despite the decline in industrial and commercial gas sales [7]. - The company has a strong liquidity position, with cash and bank deposits of HKD 11.24 billion, allowing for share buybacks and maintaining dividends [7]. Financial Data and Profit Forecast - Revenue projections for the years 2023 to 2027 are as follows: HKD 101.272 billion (2023), HKD 102.676 billion (2024), HKD 99.869 billion (2025E), HKD 104.276 billion (2026E), and HKD 109.483 billion (2027E) [6][8]. - Net profit attributable to shareholders is forecasted to be HKD 5.224 billion (2023), HKD 4.088 billion (2024), HKD 4.213 billion (2025E), HKD 4.963 billion (2026E), and HKD 5.221 billion (2027E) [6][8]. - The earnings per share (EPS) is projected to be HKD 2.30 (2023), HKD 1.80 (2024), HKD 1.85 (2025E), HKD 2.18 (2026E), and HKD 2.29 (2027E) [6][8]. - The price-to-earnings (P/E) ratios for 2025 to 2027 are estimated at 10.3, 8.7, and 8.3, respectively [7].

Core Viewpoint - China Resources Gas (01193) reported a 30% year-on-year decline in net profit to 2.4 billion yuan, which was below expectations due to higher-than-expected sales, administrative, and management expenses, as well as poor performance in its integrated services business [1] Financial Performance - The company plans to maintain its annual dividend unchanged and will repurchase up to 3% of its shares within the year [1] - The target price has been adjusted down to 23.38 HKD while maintaining a "Buy" rating [1] Future Outlook - It is anticipated that the company's profit will decline by 52% in the second half of the year compared to the first half, primarily due to significant increases in accounting costs typically occurring in the latter half [1] - Earnings forecasts for the group have been revised down by 18% to 19% for the years 2025 to 2027 [1]