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Hong Kong & China Gas Co Ltd (HK:0003)
:0003
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Hong Kong & China Gas Co (0003) AI Stock Analysis

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HK:0003

Hong Kong & China Gas Co

(OTC:0003)

Rating:65Neutral
Price Target:
HK$7.00
▲(0.72%Upside)
The company's stock score is primarily impacted by its financial performance, which is hindered by challenges in revenue and margin maintenance, and a lack of cash flow transparency. Technical analysis suggests limited momentum, while the valuation indicates an overvalued position despite a high dividend yield.
Positive Factors
Business Momentum
Analyst recommends a BUY rating with improved business momentum in China and a decent dividend yield.
Renewable Energy Expansion
Hong Kong gas operation is the cash cow to fund expansion in renewables, generating very stable cashflows.
Negative Factors
Economic Growth Concerns
High LNG prices and weak China and Hong Kong’s economic growth will be negative to earnings.
LNG Prices Impact
High LNG prices will put pressure on the dollar margin of its China operations.

Hong Kong & China Gas Co (0003) vs. iShares MSCI Hong Kong ETF (EWH)

Hong Kong & China Gas Co Business Overview & Revenue Model

Company DescriptionThe Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas in Hong Kong and Mainland China. It is involved in the provision of liquefied natural gas, methanol, and coal and other chemicals; conversion and utilization of biomass; agricultural waste; and operation of natural gas refilling stations, piped city-gas projects, upstream and midstream developments, photovoltaic projects, water and wastewater treatment projects, energy exploration and utilization ventures, and aviation fuel facilities. The company supplies town gas to approximately 1.9 million customers. It also provides network connectivity, and data center and cloud computing services; and engages in the software development, solution implementation, and systems integration activities. In addition, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Further, it is involved in water supply, and domestic sewage and industrial wastewater treatment serving 2.4 million customers. Additionally, the company manufactures polyethylene piping and fittings; and engages in the customers center, café, restaurant, retail sale, laundry, automatic meter reading system development, laboratory testing, payment gateway and related, project management, landfill gas project, financing, logistics, oil, research and development, property development, and securities investment activities. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.
How the Company Makes MoneyHong Kong & China Gas Co generates revenue primarily through the sale and distribution of gas to residential, commercial, and industrial customers. The company's key revenue streams include the fees collected from gas consumption, the sale of gas-related appliances, and maintenance services. Towngas also earns income from its investments in infrastructure projects, such as the construction and management of pipelines and gas storage facilities. Additionally, the company has expanded into new markets and sectors, including renewable energy projects and waste-to-energy initiatives, which contribute to its diversified earnings portfolio. Strategic partnerships with local governments and other energy companies further bolster its revenue by allowing for collaborative ventures and access to new technologies and markets.

Hong Kong & China Gas Co Financial Statement Overview

Summary
The company faces challenges in maintaining revenue growth and margins, with a slight increase in leverage. While the equity position remains stable, the absence of cash flow data for 2024 is concerning, impacting the overall financial health score.
Income Statement
72
Positive
The company's gross profit margin for 2024 was 15.22%, indicating a reduction from the previous year, which was 38.58%. The net profit margin was 10.29%, slightly down from 10.85% in 2023. Revenue declined by 2.63% compared to 2023, reflecting some challenges in growth. EBIT margin was 7.95%, down from 31.76% in 2023, showing decreased operational efficiency. Despite these challenges, the company maintained a strong EBITDA margin of 20.79%.
Balance Sheet
78
Positive
The debt-to-equity ratio increased to 1.02 from 0.95 in 2023, indicating a slight increase in leverage. Return on equity (ROE) was 9.95%, slightly down from 10.32% in 2023, reflecting stable profitability. The equity ratio was 36.26%, down from 36.96%, showing a stable financial position despite minor fluctuations in equity levels.
Cash Flow
60
Neutral
The company did not report any free cash flow or operating cash flow in 2024, which limits the ability to assess cash flow health. In prior years, free cash flow had varied, with a significant value of 2,504 million in 2023. This absence of data in 2024 raises concerns about liquidity and cash management.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue55.47B56.97B60.95B53.56B40.93B
Gross Profit23.11B21.98B14.38B14.02B12.72B
EBITDA11.53B11.88B12.34B10.42B11.34B
Net Income5.71B6.18B5.36B5.13B6.12B
Balance Sheet
Total Assets158.27B161.98B168.47B168.07B150.28B
Cash, Cash Equivalents and Short-Term Investments7.69B10.41B13.36B10.63B7.83B
Total Debt58.81B56.91B66.06B58.15B45.31B
Total Liabilities89.94B90.96B95.71B88.61B73.51B
Stockholders Equity57.39B59.85B61.23B67.43B66.76B
Cash Flow
Free Cash Flow2.54B2.50B1.40B2.20B3.29B
Operating Cash Flow9.20B10.93B9.73B10.62B10.58B
Investing Cash Flow-2.31B-2.50B-8.41B-13.47B-8.17B
Financing Cash Flow-9.21B-12.45B1.91B5.80B-3.01B

Hong Kong & China Gas Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.95
Price Trends
50DMA
6.74
Positive
100DMA
6.61
Positive
200DMA
6.24
Positive
Market Momentum
MACD
0.07
Negative
RSI
65.50
Neutral
STOCH
86.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0003, the sentiment is Positive. The current price of 6.95 is above the 20-day moving average (MA) of 6.77, above the 50-day MA of 6.74, and above the 200-day MA of 6.24, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 65.50 is Neutral, neither overbought nor oversold. The STOCH value of 86.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0003.

Hong Kong & China Gas Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$16.91B17.004.48%3.26%4.72%5.95%
65
Neutral
$129.69B22.709.72%5.04%-2.63%-5.90%
$5.84B12.906.04%7.33%
$5.95B12.169.94%1.54%
$1.77B8.446.93%77.71%
$9.28B11.4513.65%0.51%
€1.17B65.161.91%0.52%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0003
Hong Kong & China Gas Co
6.95
0.80
13.01%
CGHOF
China Gas Holdings
1.00
0.16
19.05%
CRGGF
China Resources Gas Group
2.81
-0.93
-24.87%
TGASF
Towngas China Co
0.51
0.17
50.00%
XNGSF
ENN Energy Holdings
8.51
1.48
21.05%
DE:MJVC
Zhongyu Gas Holdings Limited
0.40
-0.12
-23.08%

Hong Kong & China Gas Co Corporate Events

Hong Kong & China Gas Co Announces AGM Agenda and Strategic Resolutions
Apr 23, 2025

The Hong Kong and China Gas Company Limited has announced the agenda for its upcoming Annual General Meeting, scheduled for June 4, 2025. Key items include the consideration of audited financial statements, declaration of a final dividend, re-election of directors, and approval of non-executive director fees. Additionally, the company seeks approval for share buybacks and the issuance of new shares, which could impact its financial strategy and shareholder value.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2025