[ET Net News Agency, 12 September 2018] UBS Global Research lowered its target price
for China Gas Holdings (00384) to HK$26 from HK$29.3, but upgraded its rating to "neutral"
from "sell".
The research house said the stock has dropped 35% over the past three months. It is now
trading at its historical average PE, while its FY2020 PE (excluding connection fees) is
largely in line with those of its peers.
At this valuation, UBS thinks robust gas volume growth and potential risks from
connection fees, dollar margins and government subsidies have been factored in.
UBS expects China Gas to deliver faster earnings growth than its peers, mainly driven by
its aggressive expansion in rural coal-to-gas switching areas. It forecast a 27% FY2018-21
city gas sales volume CAGR for China Gas, compared to 22%/18% for ENN Energy (02688)/China
Resources Gas (01193). (KL)