Towngas China Co (1083) AI Stock Analysis

• Market Cap: $14.00B
• Dividend Yield: 4.73%
• Average Volume (3M): 9.42M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.58
• Revenue Growth: 7.42%
• EPS Growth: -2.02%
• Country: HK
• Employees: 24,455
• Sector: Utilities
• Sector Strength: 66
• Industry: Regulated Gas
• EPS (TTM): 0.47
• Shares Outstanding: 3,482,609,900
• 10 Day Avg. Volume: 12,787,654
• 30 Day Avg. Volume: 9,422,667
• PEG Ratio: 0.34
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -11.65
• 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: $3.30
• Price Target Upside: -18.40% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: HK$4.50 ▲(11.39%Upside)

Towngas China Co's solid technical momentum and attractive valuation lead the positive outlook. Despite challenges in cash flow generation, its financial performance remains robust, thanks to strong revenue growth and operational efficiency. Investors should be aware of the potential risks related to cash flow issues.

Positive Factors

Business Transformation

Towngas Smart Energy is transforming from a pure gas distributor to a smart energy service provider, particularly for industrial parks, to ride on China’s decarbonization plan.

Green Energy Focus

The transaction allows Towngas Smart Energy to be more focused on green energy development.

Strategic Alliances

It has formed alliances with various strategic partners, including SPIC, Tencent, Longi, CATL, etc to strengthen its competitive advantages.

Negative Factors

Economic Recovery

Lower earnings growth is anticipated due to weak economic recovery and slow development of smart energy.

Electricity Tariff Risk

A downgrade to HOLD reflects higher downside risk in electricity tariff due to increasing participation of distributed solar projects in market-based transactions.

Towngas China Co Business Overview & Revenue Model

Company Description

Towngas Smart Energy Company Limited, an investment holding company, sells and distributes piped gas in the People's Republic of China. The company operates through two segments, Sales and Distribution of Piped Gas and Related Products, and Gas Connection. It engages in the provision of natural gas and related services; construction of gas pipelines; operation of urban pipeline gas network; sale of gas related household appliances; and other value-added services. The company also offers financing services; provides engineering works services; and operates vehicle gas refilling stations, as well as smart energy solutions. It serves approximately 15.09 million customers. The company was formerly known as Towngas China Company Limited and changed its name to Towngas Smart Energy Company Limited in December 2021. The company was founded in 1998 and is headquartered in North Point, Hong Kong. Towngas Smart Energy Company Limited is a subsidiary of The Hong Kong and China Gas Company Limited.

How the Company Makes Money

Towngas China Co Ltd generates revenue primarily through the distribution and sale of natural gas to a diverse customer base, including residential, commercial, and industrial clients. The company earns income by charging for the volume of gas consumed by these customers. Additionally, Towngas China invests in building and maintaining pipeline infrastructure, which not only supports its gas distribution operations but also provides revenue through construction and management fees. The company may also engage in gas exploration and production activities, contributing to its earnings from the sale of natural gas. Strategic partnerships with local governments and other energy firms can enhance Towngas China's market position and expand its revenue streams by facilitating new projects and joint ventures in the energy sector.

Towngas China Co Financial Statement Overview

Summary

Towngas China Co exhibits strong revenue growth and improved operational efficiency with a gross profit margin of 25.65% and an EBIT margin of 18.98%. However, the net profit margin decreased to 7.54%, and negative free cash flow highlights challenges in cash generation, impacting financial flexibility.

Income Statement

Towngas China Co has demonstrated strong revenue growth, with total revenue increasing by 7.4% from 2023 to 2024. The gross profit margin improved to 25.65% in 2024, indicating effective cost management. However, the net profit margin slightly decreased to 7.54%, suggesting some challenges in maintaining profitability at the net level. The EBIT margin increased to 18.98%, highlighting operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio stands at 0.75, reflecting a moderate level of leverage. The equity ratio is 44.21%, indicating a solid equity base relative to total assets. Return on equity is at 6.85%, showing a modest return for shareholders. Overall, the balance sheet is stable but shows room for improvement in leveraging equity more effectively.

Cash Flow

The cash flow analysis reveals challenges, with free cash flow remaining negative in recent years. The lack of operating cash flow data for 2024 prevents a detailed analysis, but the consistent negative free cash flow indicates issues in cash generation and capital management. This poses a risk to financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.31B	19.84B	20.07B	17.13B	12.83B
Gross Profit	5.47B	4.72B	2.32B	2.72B	2.32B
EBITDA	2.91B	2.73B	2.53B	3.60B	2.69B
Net Income	1.61B	1.57B	964.86M	1.25B	1.45B
Balance Sheet
Total Assets	53.04B	53.46B	52.94B	54.24B	42.89B
Cash, Cash Equivalents and Short-Term Investments	2.73B	4.11B	4.08B	4.08B	2.34B
Total Debt	17.47B	18.56B	19.83B	19.54B	11.58B
Total Liabilities	27.28B	28.23B	29.08B	29.06B	20.24B
Stockholders Equity	23.45B	22.85B	21.50B	22.90B	20.72B
Cash Flow
Free Cash Flow	-1.49B	-3.42B	-1.57B	-177.88M	343.03M
Operating Cash Flow	2.35B	1.30B	1.80B	2.61B	2.71B
Investing Cash Flow	-2.77B	635.96M	-3.57B	-8.14B	-2.95B
Financing Cash Flow	-862.84M	-1.75B	1.98B	7.31B	425.26M

Towngas China Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1083, the sentiment is Positive. The current price of 4.04 is above the 20-day moving average (MA) of 3.82, above the 50-day MA of 3.53, and above the 200-day MA of 3.12, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 71.87 is Negative, neither overbought nor oversold. The STOCH value of 83.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1083.

Towngas China Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1083	74 Outperform	$14.00B	8.54	6.93%	4.73%	7.42%	-2.02%
Sector *	64 Neutral	€7.43B	4.18	-0.91%	4.52%	7.45%	-19.93%
CGHOF		$5.21B	12.32	6.04%	4.04%	―	―
CRGGF		$5.94B	12.16	9.94%	0.81%	―	―
XNGSF		$9.15B	10.90	13.65%	7.26%	―	―
MJVC		€1.21B	67.10	1.91%	0.49%	―	―
6WL		€1.26B	22.97	2.75%	1.79%	―	―

Towngas China Co Corporate Events

Towngas Smart Energy Announces Final Dividend with Scrip Option

Towngas Smart Energy Company Limited has announced a final ordinary dividend of HKD 0.16 per share for the financial year ending December 31, 2024. Shareholders have the option to receive their dividends in cash or convert them into scrip shares at a price of HKD 3.446 per share. The payment date is set for July 14, 2025, with the first date for dealing in scrip shares on July 15, 2025. This announcement reflects the company’s commitment to providing shareholder value and may impact its market positioning by offering flexible dividend options.

The most recent analyst rating on (HK:1083) stock is a Buy with a HK$3.45 price target. To see the full list of analyst forecasts on Towngas China Co stock, see the HK:1083 Stock Forecast page.

Towngas Smart Energy Announces Special Dividend with Scrip Option

Towngas Smart Energy Company Limited has announced a special dividend of HKD 0.03 per share for the financial year ending December 31, 2024. Shareholders have the option to receive the dividend in cash or convert it into scrip shares at a price of HKD 3.446 per share. The payment date for the dividend is set for July 14, 2025, with the first date of dealing in scrip shares on July 15, 2025. This announcement reflects the company’s commitment to providing value to its shareholders, potentially impacting its market positioning and stakeholder relations positively.

The most recent analyst rating on (HK:1083) stock is a Buy with a HK$3.45 price target. To see the full list of analyst forecasts on Towngas China Co stock, see the HK:1083 Stock Forecast page.

Towngas China Co Revises Annual Caps to Boost Gas and Smart Energy Transactions

Towngas China Co has announced a revision of its annual cap amounts for continuing connected transactions under its Master Gas and Smart Energy Related Agreement with HKCG. The revised annual caps for the years ending December 2025 and 2026 are significantly increased, reflecting the company’s strategy to expand its gas resources business and capitalize on the rising demand for fuel gas. This adjustment is expected to enhance synergies and optimize the supply-demand structure, benefiting both Towngas China Co and its stakeholders.

The most recent analyst rating on (HK:1083) stock is a Hold with a HK$3.00 price target. To see the full list of analyst forecasts on Towngas China Co stock, see the HK:1083 Stock Forecast page.

Towngas China Co Enhances Liquidity Through Asset Disposal

Towngas China Co announced the disposal of its equity interests in subsidiaries engaged in rooftop photovoltaic power generation projects to an asset-backed securities program, raising approximately RMB470 million. This move is part of the company’s strategy to improve liquidity through securitization of its solar assets while retaining a stake in the profits. The proceeds will be used for further investments in renewable energy projects, debt repayment, and general working capital.

The most recent analyst rating on (HK:1083) stock is a Buy with a HK$3.45 price target. To see the full list of analyst forecasts on Towngas China Co stock, see the HK:1083 Stock Forecast page.

Towngas Smart Energy Secures Shareholder Approval for Key Resolutions at AGM

Towngas Smart Energy Company Limited held its Annual General Meeting on May 29, 2025, where all proposed resolutions were approved by shareholders. The resolutions included the adoption of financial statements, re-election of directors, authorization for directors’ remuneration, re-appointment of auditors, and granting mandates for share buybacks and issuance. The successful approval of these resolutions reflects strong shareholder support and positions the company for continued operational stability and strategic growth.

The most recent analyst rating on (HK:1083) stock is a Buy with a HK$3.45 price target. To see the full list of analyst forecasts on Towngas China Co stock, see the HK:1083 Stock Forecast page.

Towngas Smart Energy Announces 2025 AGM and Key Resolutions

Towngas Smart Energy Company Limited has announced its upcoming annual general meeting scheduled for May 29, 2025, at the Hong Kong Convention and Exhibition Centre. Key agenda items include the adoption of financial statements, re-election of directors, and authorization for the board to fix director and auditor remuneration. Additionally, resolutions will be considered to authorize the directors to buy back shares and to issue additional shares, reflecting the company’s strategic financial management and shareholder engagement.