[ET Net News Agency, 23 January 2018] HSBC Global Research trimmed its target price for
ENN Energy (02688) to HK$64 from HK$68, and maintained its "buy" rating.
The research house said ENN now expects dollar margins at RMB0.63/m3 for 2017, because
during November-December 2017, (1) it purchased LNG from the market to fill demand of
0.12bcm; (2) PetroChina temporarily hiked city-gate prices for winter heating purposes;
and (3) CNG (compressed natural gas) refuelling for vehicles - at higher dollar margins
than piped gas distribution - has slowed down.
But HSBC sees a few possible catalysts to drive the stock, including: (1) New senior
management team to enhance operational efficiency and investors' confidence in the
company; (2) Rise of a new business segment known as "pan-energy"; and (3) Start of the
parent's LNG terminal in Zhejiang, providing stability in gas supply. At 12x 2018 PE, the
research house finds the shares' valuation undemanding versus peers. (KL)
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02688 ENN ENERGY
Nominal 
65.800 +0.250 (+0.381%) Others
23/01/2018 15:59
[I-bank focus]HSBC trims ENN Energy (02688) to HK$64
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