[ET Net News Agency, 26 March 2018] HSBC Global Research lifted its target price for
Kunlun Energy (00135) to HK$10.5 from HK$8.2, and reiterated its "buy" rating.
The research house said Kunlun Energy in 2017 optimised its operating structure much
more quickly than HSBC expected, positioning itself to play the leading role in the
implementation of China's coal-to-gas policy.
The company's gas handling capacity accounts for a substantial portion of China's total
2017 gas consumption of 237bcm.
Shaan-Jing IV Line was commissioned in 4Q 2017, allowing for an additional 15bcm in 2018
pipeline volumes. The company indicated that the final tariff arrangements on the
Shaan-Jing IV pipeline have not yet been agreed and, in advance of the agreement with the
NDRC, the company has been recognising revenue at the SJ I-III tariff rate.
HSBC increased its net income forecasts by 60% for 2018 and 55% for 2019. (KL)