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

• Market Cap: HK$132.86B
• Dividend Yield: 4.89%
• Average Volume (3M): 28.10M
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.42
• Revenue Growth: -2.63%
• EPS Growth: -5.90%
• Country: HK
• Employees: 56,401
• Sector: Utilities
• Sector Strength: 91
• Industry: Regulated Gas
• EPS (TTM): 0.31
• Shares Outstanding: 18,659,870,000
• 10 Day Avg. Volume: 19,347,864
• 30 Day Avg. Volume: 28,104,379
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$7.14
• Price Target Upside: 0.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Hong Kong & China Gas Co demonstrates a stable financial foundation despite challenges in revenue and margin maintenance. The stock benefits from technical upward momentum and a reasonable dividend yield, although valuation may be a concern. Investors should monitor cash flow transparency and leverage levels to ensure long-term stability.

Positive Factors

Earnings Growth

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 to finance expansion in renewable energy projects.

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 Business Overview & Revenue Model

Company Description

Hong 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 Money

Hong 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

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
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
56.97B	60.95B	53.56B	40.93B	40.63B
	Gross Profit
21.98B	14.38B	14.02B	12.72B	12.59B
	EBIT
18.10B	8.53B	8.66B	8.40B	8.02B
	EBITDA
11.88B	12.34B	10.42B	11.34B	11.83B
	Net Income Common Stockholders
6.18B	5.36B	5.13B	6.12B	7.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.41B	13.36B	10.63B	7.83B	8.20B
	Total Assets
161.98B	168.47B	168.07B	150.28B	140.47B
	Total Debt
56.91B	66.06B	58.15B	45.31B	41.63B
	Net Debt
47.93B	52.81B	47.59B	37.85B	33.78B
	Total Liabilities
90.96B	95.71B	88.61B	73.51B	67.46B
	Stockholders Equity
59.85B	61.23B	67.43B	66.76B	64.21B
Cash Flow		Free Cash Flow
2.50B	1.40B	2.20B	3.29B	3.69B
	Operating Cash Flow
10.93B	9.73B	10.62B	10.58B	10.74B
	Investing Cash Flow
-2.50B	-8.41B	-13.47B	-8.17B	-7.55B
	Financing Cash Flow
-12.45B	1.91B	5.80B	-3.01B	-3.79B

Hong Kong & China Gas Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.12
• 50DMA: Positive
• 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 7.12 is above the 20-day moving average (MA) of 6.85, above the 50-day MA of 6.58, and above the 200-day MA of 6.26, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 63.43 is Neutral, neither overbought nor oversold. The STOCH value of 68.15 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
0388	79 Outperform	$454.54B	31.36	27.96%	2.61%	19.20%	24.01%
0002	73 Outperform	$170.28B	14.36	11.36%	4.69%	4.35%	76.44%
1038	71 Outperform	$125.52B	16.15	6.62%	4.84%	-16.64%	1.10%
0003	70 Outperform	HK$132.86B	23.26	9.72%	4.89%	-2.63%	-5.90%
Sector *	63 Neutral	$8.52B	11.01	5.35%	4.37%	3.39%	-11.87%
0006	59 Neutral	$111.35B	17.88	6.95%	5.46%	-28.87%	1.93%
1193	59 Neutral	HK$49.90B	12.10	9.94%	5.76%	1.39%	-21.74%

Hong Kong & China Gas Co Corporate Events

Hong Kong & China Gas Co Announces AGM Agenda and Strategic Resolutions

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.

Hong Kong & China Gas Co Announces Final Dividend for 2024

The Hong Kong and China Gas Company Limited has announced a final ordinary cash dividend of HKD 0.23 per share for the financial year ending 31 December 2024. This announcement reflects the company’s stable financial performance and commitment to returning value to its shareholders. The dividend will be paid on 23 June 2025, following shareholder approval on 04 June 2025, with a record date set for 12 June 2025.

Hong Kong & China Gas Co Strengthens Governance with Nomination Committee Framework

The Hong Kong & China Gas Company Limited has outlined the structure and responsibilities of its Nomination Committee (NC), which will consist predominantly of independent non-executive directors. The NC is tasked with reviewing the board’s composition and diversity, recommending changes to align with corporate strategy, and assessing the independence of directors. This move is aimed at enhancing corporate governance and ensuring effective board performance, which could strengthen the company’s industry positioning and stakeholder confidence.

Hong Kong & China Gas Co Strengthens ESG Commitment with New Committee

Hong Kong & China Gas Co has established a Board Environmental, Social and Governance Committee (BESGC) to oversee and promote sustainable growth through innovative practices in environment, social, and governance areas. The committee is tasked with developing strategies, identifying ESG risks and opportunities, and reporting on ESG performance to ensure the company’s alignment with sustainable practices, thereby strengthening its industry positioning and stakeholder trust.

Hong Kong & China Gas Co Reports Strong 2024 Financials and Expands Green Energy Initiatives

Hong Kong & China Gas Co reported strong financial performance for 2024, with a 34.5% increase in core operating profit, driven by growth in both its traditional utility and expanding green energy businesses. The company is actively investing in renewable energy projects, including sustainable aviation fuel and green methanol plants, positioning itself to meet future market demand and contribute to global climate change efforts.