[ET Net News Agency, 19 July 2018] UBS Global Research lifted its target price for
China Resources Gas (CRG)(01193) to HK$43 from HK$32, and reiterated its "buy" rating.
The research house believes value is emerging following its 103ppt underperformance
versus its peers over the past 12 months despite solid fundamentals. It expects the
company's 2018-19 earnings to beat consensus, as investors are underestimating CRG's
potential benefits from coal-to-gas switching and are overly concerned about margin
pressure.
In addition, UBS believes CRG is the most defensive stock in the sector, given that: (1)
its highest exposure to high-tier cities; and (2) its healthiest balance sheet among
peers, with a net cash position by end-2018 and free cash flow yield of 9% over 2018-20.
(KL)