[ET Net News Agency, 11 September 2018] Nomura raised its target price for China
Resources Gas (CRG)(01193) to HK$36 from HK$30.7, and maintained its "neutral" rating.
The research house has recently visited the Handan (Hebei province) branch of CRG and a
rural coal-to-gas project in Liu Village, and provided its takeaways: (1) The maximum gas
usage subsidy has been cut by 20% due to financial difficulties of the local government;
(2) The company will make less rural coal-to-gas connections in Handan (18.5k this year vs
22.7k last year), as it is expanding to remote areas where economically variable projects
are fewer.
CRG plans to have a 1x1,000m3 gas storage facility in operation in Handan before this
winter. Nomura changed its 2018/19 earnings forecasts by 3%/-1% to reflect strong gas
volume, partly offset by a weaker exchange rate for CNY. (KL)