J P M O R G A N Asia Pacific Equity Research 10 December 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Asia Power Equipment/Utilities Marketing feedback, investor positioning and key debates We have interacted with >60 investors across the globe over ...

Summary of Key Points from the Conference Call Industry Overview: Global LNG Market - Global LNG demand remained stable year-on-year at 204 MTPA in 1H25, with European LNG imports increasing by 5% year-on-year to 61 MT, while Asia's LNG imports decreased by 2% year-on-year to 134 MT, primarily due to a 12% decline in Chinese consumption year-to-date [1][2][37] - Despite the stable demand in 1H25, global demand is projected to rise by 5% year-on-year to 413 MTPA in 2025, driven by new supply ramp-up [1][39] China’s LNG Market Dynamics - China's LNG imports are expected to decline to 70 MTPA in 2025, a 9% decrease year-on-year, due to rising domestic supply and pipeline imports meeting weaker gas demand [2] - China's gas demand is projected to grow by only 3% in 2025 to 439 bcm, supported by a 6% increase in domestic gas production [2] European LNG Supply and Storage - European gas inventories are approximately 65% full as of end-July, which is the lowest level in the last three years but consistent with the long-term average [3][51] - The current pace of LNG imports and storage injection rates suggests that Europe could reach 80-90% of gas storage capacity before the winter season [3] New LNG Capacity Additions - A record 107 MTPA of new LNG capacity is scheduled to come online within the next 12 months, with 46 MTPA already operational [4][16] - Significant projects include Tortue LNG (2.4 MTPA), Plaquemines LNG Phase 1 (13.3 MTPA), and Corpus Christi Stage 3 (10 MTPA) [4][16] Price Projections and Market Dynamics - Spot LNG prices are expected to decline due to increased supply, with estimates of $12.5/mmbtu in 2025, $9/mmbtu in 2026, and $7/mmbtu in 2027 [5] - The LNG market is anticipated to become net long starting from 2026, with 130 MTPA of new supply expected to reach the market between 2025-2027, representing 33% of current capacity [5][19] Investment Implications - The outlook for LNG prices is bearish due to the anticipated oversupply, leading to a preference for downstream gas utilities in Asia, such as ENN and Kunlun Energy, over LNG-focused exploration and production companies [8] - There is a projected supply gap of 100 MTPA out to 2040, necessitating new investments, although growth rates are expected to slow compared to previous years [8][29] Long-term Demand Outlook - Global LNG demand is expected to rise from 395 MTPA in 2023 to approximately 620 MTPA by 2040, indicating a need for additional LNG projects targeting final investment decisions by the end of this decade [30][29] - The long-term demand growth for LNG is anticipated to be driven by gas-favored policies in China and other Asian countries, with a potential peak in demand not expected until 2040 [29][32] Conclusion - The global LNG market is undergoing significant changes with new supply coming online, particularly from the US, which is transforming the landscape of LNG exports [10][11] - While short-term challenges exist due to oversupply and weak demand in certain regions, the long-term outlook remains positive with expected growth in demand driven by energy transition and electrification trends [8][29]

Group 1 - The Asia Value & Moat Stocks research service targets value investors looking for Asia-listed stocks with significant discrepancies between price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] - The service emphasizes investment opportunities in the Hong Kong market, providing watch lists and monthly updates for investors [1] - The Value Pendulum specializes in the Asian equity market, with over a decade of experience on both buy and sell sides, indicating a strong expertise in the region [2] Group 2 - The analyst has a beneficial long position in KUNLUN ENERGY (0135.HK), suggesting a personal investment interest in this stock [2] - The article expresses the author's own opinions and does not involve compensation from any company mentioned, indicating an independent analysis [2]