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

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

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HK

Hong Kong & China Gas Co

(OTC:0003)

Rating:65Neutral
Price Target:
HK$7.00
▲(4.63%Upside)
The overall stock score is influenced primarily by financial performance and technical analysis. The company's financial challenges and bearish technical indicators weigh down the score. However, a stable equity position and attractive dividend yield provide some support.
Positive Factors
Earnings Growth
Analyst recommends a BUY rating with improved business momentum in China and a decent dividend yield.
Financial Performance
Successful reduction in loans to improve its balance sheet will be a share price catalyst.
Negative Factors
Commodity Prices
High LNG prices will put pressure on the dollar margin of its China operations.
Economic Conditions
High LNG prices and weak China and Hong Kong’s economic growth will be negative to earnings.

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

Hong Kong & China Gas Co Business Overview & Revenue Model

Company DescriptionHong Kong & China Gas Co, also known as Towngas, is a leading energy provider in Hong Kong and mainland China. Established in 1862, the company primarily operates in the production and distribution of town gas, a clean and efficient energy source for residential, commercial, and industrial sectors. Towngas is also involved in the development of energy infrastructure, including gas pipelines and related services, to support the growing energy demands in the regions it serves.
How the Company Makes MoneyHong Kong & China Gas Co generates revenue primarily through the sale and distribution of town gas to residential, commercial, and industrial customers. The company's core revenue stream comes from the provision of gas supply services, which includes the installation and maintenance of gas appliances and equipment. Additionally, Towngas earns income from its investments in energy-related projects, such as the development and operation of natural gas and new energy businesses in mainland China. Strategic partnerships with local governments and other energy companies also play a significant role in expanding its market presence and enhancing its revenue potential.

Hong Kong & China Gas Co Financial Statement Overview

Summary
The company exhibits stable financial fundamentals with challenges in revenue growth and margins. The increased leverage and absence of cash flow data raise concerns. However, the equity position remains stable, and the company maintains a decent EBITDA margin, which helps balance the negatives.
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 Price6.69
Price Trends
50DMA
6.74
Negative
100DMA
6.47
Positive
200DMA
6.19
Positive
Market Momentum
MACD
-0.02
Negative
RSI
50.27
Neutral
STOCH
65.56
Neutral
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 6.69 is below the 20-day moving average (MA) of 6.69, below the 50-day MA of 6.74, and above the 200-day MA of 6.19, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 50.27 is Neutral, neither overbought nor oversold. The STOCH value of 65.56 is Neutral, 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$72.62B11.0913.65%7.30%-5.28%-13.15%
74
Outperform
$14.07B8.596.93%4.70%7.42%-2.02%
72
Outperform
HK$42.44B12.906.04%3.85%-5.40%8.76%
65
Neutral
$124.83B21.869.72%6.88%-2.63%-5.90%
63
Neutral
HK$30.58B8.235.37%5.32%-3.09%4.51%
59
Neutral
$46.61B11.409.94%6.81%1.39%-21.74%
50
Neutral
€11.19B77.521.91%0.49%-1.26%-40.09%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0003
Hong Kong & China Gas Co
6.69
0.96
16.71%
HK:1193
China Resources Gas Group
20.55
-7.81
-27.54%
HK:3633
Zhongyu Gas Holdings Limited
4.07
-0.71
-14.80%
HK:2688
ENN Energy Holdings
64.35
4.01
6.64%
HK:0384
China Gas Holdings
7.79
1.00
14.80%
HK:1083
Towngas China Co
4.04
1.32
48.64%

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 03, 2025