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Towngas China Co (HK:1083)
:1083

Towngas China Co (1083) AI Stock Analysis

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HK

Towngas China Co

(OTC:1083)

Rating:70Neutral
Price Target:
Towngas China Co's strong financial performance, particularly in revenue growth and operational efficiency, is a significant strength. However, challenges in cash flow generation and net profitability limit the upside. The stock's positive technical trend and attractive valuation, including a low P/E ratio and high dividend yield, further support the investment case.
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.
Strategic Alliances
It has formed alliances with various strategic partners, including SPIC, Tencent, Longi, CATL, etc to strengthen its competitive advantages.
Negative Factors
Earnings Growth
Lower earnings growth is anticipated due to weak economic recovery and slow development of smart energy.
Market Participation 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 (1083) vs. iShares MSCI Hong Kong ETF (EWH)

Towngas China Co Business Overview & Revenue Model

Company DescriptionTowngas 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 MoneyTowngas 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 solid revenue growth and operational efficiency, as seen in improved gross and EBIT margins. However, profitability at the net level and cash flow generation present challenges. The balance sheet remains stable, but there is a need for better cash flow management to enhance financial resilience.
Income Statement
75
Positive
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
68
Positive
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
40
Negative
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 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
21.31B19.84B20.07B17.13B12.83B
Gross Profit
5.47B4.72B2.32B2.72B2.32B
EBIT
4.05B3.41B1.61B2.11B1.82B
EBITDA
2.91B2.73B2.53B3.60B2.69B
Net Income Common Stockholders
1.61B1.57B964.86M1.25B1.45B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.73B4.11B4.08B4.08B2.34B
Total Assets
53.04B53.46B52.94B54.24B42.89B
Total Debt
17.47B18.56B19.83B19.54B11.58B
Net Debt
14.77B14.48B15.83B15.47B9.36B
Total Liabilities
27.28B28.23B29.08B29.06B20.24B
Stockholders Equity
23.45B22.85B21.50B22.90B20.72B
Cash FlowFree Cash Flow
-1.49B-3.42B-1.57B-177.88M343.03M
Operating Cash Flow
0.001.30B1.80B2.61B2.71B
Investing Cash Flow
-2.77B635.96M-3.57B-8.14B-2.95B
Financing Cash Flow
-862.84M-1.75B1.98B7.31B425.26M

Towngas China Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price3.73
Price Trends
50DMA
3.33
Positive
100DMA
3.15
Positive
200DMA
3.03
Positive
Market Momentum
MACD
0.08
Negative
RSI
75.62
Negative
STOCH
95.89
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 3.73 is above the 20-day moving average (MA) of 3.40, above the 50-day MA of 3.33, and above the 200-day MA of 3.03, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 75.62 is Negative, neither overbought nor oversold. The STOCH value of 95.89 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$72.11B11.0213.65%4.69%-5.28%-13.15%
70
Neutral
HK$12.98B7.936.93%4.50%7.42%-2.02%
64
Neutral
$8.52B10.394.24%4.38%4.14%-13.04%
60
Neutral
HK$2.75B8.315.13%5.83%-1.30%-38.13%
59
Neutral
HK$48.88B11.969.94%4.34%1.39%-21.74%
51
Neutral
HK$886.71M10.816.29%-21.48%-7.50%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1083
Towngas China Co
3.73
1.00
36.78%
HK:6828
Beijing Gas Blue Sky Holdings Ltd
0.04
0.00
0.00%
HK:1600
Tian Lun Gas Holdings Limited
2.80
-1.04
-27.08%
HK:1193
China Resources Gas Group
21.55
-4.89
-18.50%
HK:2688
ENN Energy Holdings
63.90
-0.49
-0.76%

Towngas China Co Corporate Events

Towngas Smart Energy Announces 2025 AGM and Key Resolutions
Apr 25, 2025

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.

Towngas Smart Energy Grants 11.6 Million Share Options to Key Personnel
Mar 18, 2025

Towngas Smart Energy Company Limited announced the grant of 11,600,000 share options to various directors and senior management staff. This initiative aims to incentivize and reward key personnel for their contributions to the company, aligning with the company’s strategy to retain talent and motivate employees. The share options, which have a vesting period of one year and an exercise period of two years, are priced at HK$3.57 per share. The grant does not include performance targets or clawback mechanisms, but it is considered a strategic move to enhance the company’s operational efficiency and stakeholder value.

Towngas Smart Energy Forms ESG Committee to Enhance Sustainable Growth
Mar 14, 2025

Towngas Smart Energy Company Limited has established an Environmental, Social, and Governance (ESG) Committee to oversee its management in ESG matters, focusing on sustainable growth and corporate responsibility. The Committee will guide the company’s strategies and policies on ESG issues, review performance, and provide updates to the Board, highlighting the importance of ESG factors for investors and stakeholders.

Towngas Smart Energy Declares Special Dividend for 2024
Mar 14, 2025

Towngas Smart Energy Company Limited announced a special dividend of HKD 0.03 per share for the financial year ending December 31, 2024. This decision reflects the company’s commitment to delivering shareholder value and may enhance its attractiveness to investors. The dividend will be paid in cash by default, with an option for shareholders to receive scrip shares, indicating a flexible approach to dividend distribution.

Towngas Smart Energy Enhances Board Governance with New Nomination Committee Terms
Mar 14, 2025

Towngas Smart Energy Company Limited has outlined the terms of reference for its Nomination Committee, which is tasked with overseeing the appointment and re-appointment of directors. The committee, composed mainly of independent non-executive directors, will ensure compliance with the Listing Rules of the Hong Kong Stock Exchange, focusing on maintaining a diverse and skilled board. This move aims to enhance corporate governance and align the board’s composition with the company’s strategic goals, potentially impacting its market positioning and stakeholder confidence.

Towngas China Co Reports Strong 2024 Financial Results with Renewable Energy Boost
Mar 14, 2025

Towngas China Co reported a 35% increase in core operating profit to over HK$1.6 billion for 2024, driven by strong performance in renewable energy and steady growth in its gas business. The company achieved a 7.4% revenue growth to HK$21,314 million, with significant contributions from its renewable energy segment, which saw a five-fold increase in net profit. The company also issued an asset-backed securities program to reduce financing costs and plans to invest further in renewable projects. A proposed dividend of 19 HK cents per share reflects the company’s recognition of shareholder support.

Towngas Smart Energy Declares Final Dividend for 2024
Mar 14, 2025

Towngas Smart Energy Company Limited announced a final dividend of HKD 0.16 per share for the financial year ending December 31, 2024, with a cash dividend as the default option. Shareholders have the option to elect for scrip shares, with further details on conversion rates and dealing dates to be announced. This announcement reflects the company’s commitment to returning value to its shareholders and may influence investor sentiment positively.

Towngas Smart Energy Schedules Board Meeting for Annual Results Approval
Mar 4, 2025

Towngas Smart Energy Company Limited has announced a board meeting scheduled for March 14, 2025, to approve the audited consolidated annual results for the year ending December 31, 2024. The meeting will also consider the payment of a final dividend, reflecting the company’s ongoing commitment to shareholder returns and financial transparency.

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.