China Gas Holdings (CGHOF – Research Report), the Utilities sector company, was revisited by a Wall Street analyst yesterday. Analyst Neil Beveridge from Bernstein remains neutral on the stock and has a HK$12.30 price target.
Neil Beveridge has given his Buy rating due to a combination of factors related to China Gas Holdings’ financial performance and strategic initiatives. Despite a reported year-over-year decrease in net profit for the first half of fiscal year 2024, Beveridge identified several positive aspects. The decline in profit was partly attributable to one-off items, which when excluded, presented a less severe profit reduction. Moreover, China Gas Holdings has demonstrated confidence in its financial health by increasing the interim dividend. Beveridge also noted the company’s guidance indicating a 5-10% increase in profit for the full year, signaling management’s optimism about future performance.
Additionally, Beveridge’s rating considers the company’s operational metrics and growth prospects. While there has been a decrease in gas sales volumes and a downward revision in volume growth forecast, the company still managed to improve dollar margins year-over-year. China Gas Holdings also reported strong operating cash flows, reduced accounts receivable, and robust free cash flow. The company’s strategic focus on ‘Smart Living’ within its value-added services segment and prudent capital expenditure guidance for FY2024, with limited allocation for mergers and acquisitions, further underpin Beveridge’s positive outlook on the stock.
According to TipRanks, Beveridge is a 2-star analyst with an average return of -0.2% and a 43.55% success rate.
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China Gas Holdings (CGHOF) Company Description:
China Gas Holdings Ltd. engages in the investment, construction, and management of city gas pipeline infrastructure and distribution of natural gas and liquefied petroleum gas (LPG). It operates through the following segments: Sales of Piped Gas, Gas Connection, Sales of LPG, Value-Added Services, and Zhongyu Gas. The company was founded by Ming Hui Liu and Yong Huang on August 22, 1995 and is headquartered in Hong Kong.
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