[ET Net News Agency, 27 March 2018] Daiwa Research lifted its target price for ENN
Energy (02688) to HK$78 from HK$71, and reiterated its "buy" rating.
The research house sees ENN as its sole top sector pick for its integrated business
model and natural-gas supply chain. Daiwa believes ENN's self-owned LNG contracts and
active participation in distributed-energy/integrated-energy (DE/IE) projects for large
commercial and industrial (C&I) users will ease its dollar margin squeeze in the long run.
Moreover, ENN is the only bigcap city-gas company to achieve 15%-plus long-term
recurring profit growth, which is also its guidance, or 20% DPS growth without raising its
payout ratio significantly.
Daiwa lifted its 2018 EPS forecast by 1% and 2018-19 revenue estimates by 13-14%,
primarily on higher wholesale gas revenue. (KL)