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 investment rating for the company is Neutral [4][19]. Core Views - The report indicates that the company's earnings for the fiscal year 2025 will be impacted by one-time items, while cash flow certainty for fiscal year 2026 remains to be improved [2][8]. - The company is expected to maintain a high dividend yield of 6.8%, which is the highest among gas distributors covered [8][19]. - The report suggests that the valuation is reasonable at approximately 10 times the fiscal year 2026 earnings, with a target price adjustment to HKD 6.80, reflecting a potential downside of 7.5% from the current price [8][19]. Financial Overview - Revenue projections for the company are as follows: - FY2024: HKD 81,410 million - FY2025: HKD 79,258 million (down 2.6% YoY) - FY2026E: HKD 80,449 million (up 1.5% YoY) [3][22]. - Net profit estimates are: - FY2024: HKD 3,185 million - FY2025: HKD 3,252 million (up 2.1% YoY) - FY2026E: HKD 3,707 million (up 14% YoY) [3][22]. - The company’s earnings per share (EPS) are projected to be: - FY2024: HKD 0.73 - FY2025: HKD 0.63 (down 14.1% YoY) - FY2026E: HKD 0.68 (up 8.5% YoY) [3][22]. - The company’s free cash flow reached a record high of HKD 46.6 billion [8]. Operational Insights - Retail gas sales volume is expected to grow by 2% in FY2026, with a slight increase in gas margin to RMB 0.55 per cubic meter [10][11]. - The company anticipates adding 120,000 to 140,000 new residential connections in FY2025 [11]. - The management's guidance for FY2025 includes a gas margin of RMB 0.53 per cubic meter and a growth rate of over 2% for gas sales volume [11]. Market Performance - The stock has shown a year-to-date change of 8.57% [6]. - The 52-week high and low for the stock are HKD 8.26 and HKD 5.87, respectively [6].

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 6.70, indicating a potential downside of 11.4% from the current price of HKD 7.56 [4][17]. Core Insights - The company is expected to experience a decline in profit for the fiscal year 2025 due to the impact of a warm winter, with a focus on the certainty of profit improvement in the following year [2][7]. - The forecast for fiscal year 2025 has been adjusted downwards by approximately 2% to reflect the impact of the warm winter on gas sales volume, with an expected core profit decrease of 6.4% to HKD 3.712 billion [7][8]. - The company anticipates a slight increase in retail gas volume of about 1% year-on-year, which is below the company's guidance of 2% [7][8]. Financial Overview - Revenue is projected to decline from HKD 91,988 million in 2023 to HKD 75,183 million in 2025, reflecting a year-on-year decrease of 7.6% [3][18]. - Net profit is expected to decrease from HKD 4,293 million in 2023 to HKD 3,712 million in 2025, with a year-on-year decline of 6.4% [3][18]. - The earnings per share (EPS) is forecasted to drop from HKD 0.76 in 2023 to HKD 0.68 in 2025, indicating a decrease of 6.4% [3][18]. Operational Insights - The company expects retail gas volume to grow by 2% year-on-year in fiscal year 2026, with a projected gas margin increase to RMB 0.54 per cubic meter [7][10]. - The number of new residential connections is anticipated to decline by approximately 21% to 1.25 million households in fiscal year 2025 [7][9]. - The company maintains a dividend of HKD 0.35 for the final period, with an annual payout of HKD 0.50 [7][8]. Valuation Metrics - The price-to-earnings (P/E) ratio is projected to be 11.1 times for fiscal year 2025, with an expected price-to-book (P/B) ratio of 0.75 [3][18]. - The company has a dividend yield of 6.6%, which is considered defensive [7][8]. - The target price has been adjusted to HKD 6.70 from the previous HKD 5.92, reflecting a more favorable valuation compared to other gas companies [7][8].

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 20.80, representing a potential downside of 26.2% from the current price of HKD 28.20 [1][4][17]. Core Insights - The company's operational and profit growth for 2024 is under pressure, necessitating a rebalancing of its future profit structure [2]. - The core profit for 2024 is expected to be significantly below market expectations, with a forecast of HKD 4.15 billion, which is 30% lower than the previous expectations [7]. - The company has seen a 20% year-on-year decrease in residential connections, which is a major factor contributing to the lower-than-expected profitability [7]. - The retail gas volume growth for the year is projected at 2.9%, below the anticipated 5%, influenced by a warmer winter [7]. - The dividend policy appears irregular, causing confusion among investors, with a projected decline in the full-year dividend payout ratio to 52% from 2023 [7]. Financial Overview - Revenue is projected to grow from HKD 101.27 billion in 2023 to HKD 102.68 billion in 2024, reflecting a modest year-on-year growth of 1.4% [3][18]. - Net profit is expected to decline from HKD 5.22 billion in 2023 to HKD 4.09 billion in 2024, marking a significant year-on-year decrease of 21.7% [3][18]. - The earnings per share (EPS) is forecasted to remain flat at HKD 1.79 for 2024, with a slight increase to HKD 1.89 in 2025 [3][18]. - The company’s price-to-earnings (P/E) ratio is projected to decrease from 15.7 in 2023 to 14.9 in 2025, indicating a declining valuation trend [3][18]. Operational Data - The residential gas sales volume is expected to increase from 9.44 million cubic meters in 2023 to 10.04 million cubic meters in 2024, representing a growth rate of 2.9% [10]. - The company anticipates a decrease in new residential connections, with projections of 2.69 million in 2024, down from 3.37 million in 2023 [10]. - The retail gas margin is expected to slightly improve to RMB 0.54 per cubic meter by 2025 [10].

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 20.80, indicating a potential downside of 26.2% from the current price of HKD 28.20 [1][4][17]. Core Insights - The company's operational and profit growth for 2024 is under pressure, necessitating a rebalancing of its future profit structure [2]. - The core profit for 2024 is expected to be significantly below market expectations, with a forecast of HKD 4.15 billion, which is 30% lower than previous estimates [7]. - The company has seen a 20% year-on-year decrease in residential connections, which is a major factor contributing to the disappointing earnings [7]. - Despite a 67% increase in interim dividends, the final dividend is expected to drop by 30% due to weaker performance in the second half of the year [7]. - The company is projected to experience a compound annual growth rate (CAGR) of only 6% in profits from 2024 to 2027 [7]. Financial Overview - Revenue is projected to grow from HKD 101.27 billion in 2023 to HKD 111.29 billion by 2027, with a CAGR of 3.2% [3][18]. - Net profit is expected to decline from HKD 5.22 billion in 2023 to HKD 4.99 billion in 2027, reflecting a downward trend in profitability [3][18]. - The earnings per share (EPS) is forecasted to increase gradually from HKD 1.79 in 2023 to HKD 2.16 in 2027, with a notable adjustment of -32.5% for 2025 [3][18]. - The company’s price-to-earnings (P/E) ratio is projected to decrease from 15.7 in 2023 to 13.1 by 2027, indicating a declining valuation trend [3][18]. Operational Data - The residential gas sales volume is expected to grow from 9.44 million cubic meters in 2023 to 12.01 million cubic meters by 2027, with a growth rate of 3.3% [10]. - The company anticipates a decrease in new residential connections, projecting 2.30 million in 2025, down 14% from the previous year [10]. - The retail gas margin is expected to stabilize at RMB 0.54 per cubic meter by 2025 [10].