＜Research＞BofAS Cuts CHINA GAS HOLD (00384.HK) TP to $7.3; EPS Miss but DPS In-Line

　　BofA Securities expected in a report that CHINA GAS HOLD (00384.HK) +0.050 (+0.700%) Short selling $11.65M; Ratio 10.900% would be a major beneficiary of rising residential gas prices in mainland China. Among its major peers, the company has the highest share of residential gas sales at 37%. The broker expected dollar margins and industrial volume of gas distributors to benefit from lower natural gas costs starting in 2H24.

　　However, BofAS noted that CHINA GAS HOLD is likely to benefit less than its peers due to its relatively small industrial business volume and rigid natural gas cost structure, while the potential impairment of receivables also made the company's earnings outlook less predictable. Therefore, the broker rated CHINA GAS HOLD Neutral.

　　Related NewsCHINA GAS HOLD (00384.HK) Annual NP $3.185B, Down 25.8% YoY; Final DPS $0.35

　　According to the broker, CHINA GAS HOLD's FY24 earnings per share (EPS) were 18% lower than its forecast, mainly due to gas sales, marketing and finance costs, as well as impaired receivables, but the company still maintained a dividend of $0.5 per share, which is in line with expectations.

　　Taking into account the higher gas sales, marketing and finance costs, BofAS lowered CHINA GAS HOLD's FY25 to FY26 EPS forecast by 11% to 12% and reduced its target price from $8.3 to $7.3. The broker expected a sustainable dividend payout of $0.5 per share, or a dividend yield of 7%.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-06-24 16:25.)

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