[ET Net News Agency, 21 October 2019] Nomura raised its target price for China
Resources Gas (CRG)(01193) to HK$42.9 from HK$36 and maintained its "neutral" rating.
The research house lifted its 2019/20 earnings forecasts for CRG by 1% for each year, as
it factored in 1H's lower-than-expected sales and administrative costs.
Nomura said investors already seem well aware of slower gas volume growth. Thus, CRG's
two near-term catalysts are likely to be (1) a dollar margin recovery in 2H; and (2) a
dividend hike.
Nomura thinks CRG's typical utility profit structure - with a higher percentage being
derived from gas sales - will, in the long run, make it the biggest beneficiary relative
to peers if it can successfully source cheaper gas after National Pipeline Company
commences operation. (KL)