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

• Market Cap: $132.49B
• Dividend Yield: 4.94%
• Average Volume (3M): 22.06M
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.30
• Revenue Growth: 0.36%
• EPS Growth: 2.55%
• Country: HK
• Employees: 56,401
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.16
• Shares Outstanding: 18,659,870,000
• 10 Day Avg. Volume: 25,817,623
• 30 Day Avg. Volume: 22,061,121
• PEG Ratio: -6.49
• Price to Book (P/B): 2.02
• Price to Sales (P/S): 2.09
• P/FCF Ratio: 45.62
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 3.35
• Enterprise Value/Gross Profit: 20.80
• Enterprise Value/Ebitda: 15.65
• 1Y Price Target: $6.63
• Price Target Upside: -6.68% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: HK$7.50 ▲(5.63% Upside)

The overall stock score of 65 reflects the company's stable but challenged financial performance, with concerns about cash flow transparency. Technical indicators suggest a bearish trend, while the valuation is moderate with an attractive dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Diversified Revenue Streams

The company's diversification into infrastructure and renewable energy projects provides multiple revenue streams, reducing dependency on traditional gas sales and enhancing long-term stability.

Strategic Partnerships

Strategic partnerships enhance market access and technological capabilities, supporting sustainable growth and competitive advantage in the energy sector.

Stable Profitability

Stable return on equity indicates consistent profitability, suggesting effective management and a resilient business model that can withstand market fluctuations.

Negative Factors

Revenue Decline

A decline in revenue indicates challenges in market demand or competitive pressures, which could impact long-term growth prospects if not addressed.

Decreased Margins

Significant reduction in gross profit margin suggests increased costs or pricing pressures, potentially affecting profitability and operational efficiency over time.

Increased Leverage

Rising leverage can strain financial flexibility and increase risk, particularly if revenue and cash flow challenges persist, impacting long-term financial health.

Hong Kong & China Gas Co Business Overview & Revenue Model

Company Description

The 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 Money

The company generates revenue primarily through the sale of natural gas to residential, commercial, and industrial customers, which constitutes its core revenue stream. Additionally, it earns income from the sale of gas appliances and equipment, as well as through energy services that include installation and maintenance. Another significant source of revenue comes from the development and management of gas infrastructure projects, often in partnership with government agencies and other stakeholders. The company also benefits from tariffs and regulated pricing structures established by local authorities, ensuring a stable income flow.

Hong Kong & China Gas Co Financial Statement Overview

Summary

The company's financial performance shows challenges in maintaining revenue growth and margins, with a slight increase in leverage. The absence of cash flow data for 2024 raises concerns about liquidity and cash management. The company should focus on enhancing operational efficiency and improving cash flow transparency.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	55.49B	55.47B	56.97B	60.95B	53.56B	40.93B
Gross Profit	8.95B	23.11B	21.98B	14.38B	14.02B	12.72B
EBITDA	11.88B	12.16B	11.88B	12.34B	10.42B	11.34B
Net Income	5.64B	5.71B	6.18B	5.36B	5.13B	6.12B
Balance Sheet
Total Assets	162.42B	158.27B	161.98B	168.47B	168.07B	150.28B
Cash, Cash Equivalents and Short-Term Investments	9.79B	7.69B	10.41B	13.36B	10.63B	7.83B
Total Debt	62.06B	58.81B	56.91B	60.44B	55.92B	43.03B
Total Liabilities	93.50B	89.94B	90.96B	95.71B	88.61B	73.51B
Stockholders Equity	57.61B	57.39B	59.85B	63.61B	69.81B	66.76B
Cash Flow
Free Cash Flow	3.95B	2.54B	2.50B	1.40B	2.20B	3.29B
Operating Cash Flow	9.75B	9.00B	10.93B	9.73B	10.62B	10.58B
Investing Cash Flow	-2.06B	-2.31B	-2.50B	-8.41B	-13.47B	-8.17B
Financing Cash Flow	-8.05B	-9.21B	-12.45B	1.91B	5.39B	-3.01B

Hong Kong & China Gas Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 7.1 is above the 20-day moving average (MA) of 7.08, below the 50-day MA of 7.22, and above the 200-day MA of 6.86, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 67.13 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2688	76 Outperform	HK$77.12B	12.05	13.36%	4.30%	-3.19%	-2.68%
1193	75 Outperform	HK$49.40B	16.34	7.17%	4.43%	-4.37%	-41.14%
0384	66 Neutral	HK$41.73B	14.71	4.98%	6.44%	-2.28%	-9.61%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
0003	65 Neutral	$132.49B	23.51	9.86%	4.94%	0.36%	2.55%
1083	61 Neutral	HK$13.40B	7.82	6.98%	6.38%	3.86%	30.34%
3633	48 Neutral	HK$7.59B	49.73	2.04%	0.71%	-7.82%	-38.06%