[ET Net News Agency, 14 January 2020] Credit Suisse lowered its target price for Hong
Kong and China Gas (HKCG)(00003) to HK$11.6 from HK$11.9 and maintained its "underperform"
rating.
The research house cut its FY2019-21 EPS forecasts for HKCG by 1-3% to reflect the
weakness in HK gas demand and reiterate the stock as one of Credit Suisse's top
underperform calls for 2020.
Despite recent corrections, the valuation remains very stretched at 31x FY2020 P/E,
implying HK business is trading close to 50x if using 13x for the mainland China business.
Credit Suisse cut its FY2019-21 gas sales forecasts by 2-3% to incorporate the weakness,
resulting in 1%-2% EPS cuts for the same period. (KL)