Zhongyu Gas Holdings Limited (3633) AI Stock Analysis

• Market Cap: HK$7.83B
• Dividend Yield: 0.71%
• Average Volume (3M): 23.38M
• Price to Earnings (P/E): 51.4
• Beta (1Y): -0.11
• Revenue Growth: -7.82%
• EPS Growth: -38.06%
• Country: HK
• Employees: 5,146
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.09
• Shares Outstanding: 2,748,305,200
• 10 Day Avg. Volume: 32,722,401
• 30 Day Avg. Volume: 23,379,194
• PEG Ratio: -2.16
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 36.06
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: HK$2.50 ▼(-10.07% Downside)

Zhongyu Gas Holdings Limited faces significant challenges with declining profitability, high leverage, and liquidity concerns. The technical indicators suggest a bearish trend, and the high P/E ratio indicates potential overvaluation. These factors contribute to a cautious outlook for the stock.

Positive Factors

Revenue Growth

Consistent revenue expansion from 8.14bn to 13.47bn over 2019–2024 indicates the company is expanding its customer base and pipeline footprint. Durable top-line growth supports economies of scale, improves supplier leverage, and underpins long-term investment capacity despite margin pressure.

Regulated Gas Distribution Model

Operating in regulated natural gas distribution provides predictable demand and often tariff frameworks that support revenue visibility. The capital-intensive pipeline network creates barriers to entry, making the business structurally defensive and enabling relatively stable cash flows over multi-year horizons.

Local Government Partnerships & Expansion Focus

Close ties with local governments and emphasis on expanding pipelines in underserved regions ease permitting, accelerate customer connections, and generate connection-fee revenue. These structural partnerships lower acquisition costs and support sustainable network-led growth as urbanization progresses.

Negative Factors

Declining Profitability

Material margin compression over several years points to rising input costs, pricing pressure, or operational inefficiencies. Persistently weaker gross and net margins reduce retained earnings, impair the firm's ability to self-fund capex, and weaken returns on invested capital over the medium term.

High Leverage

Sustained elevated indebtedness constrains financial flexibility and raises refinancing and interest-rate risk. With leverage at material levels, the company is more exposed if cash generation weakens, limiting capacity to pursue strategic investments or absorb regulatory/commodity shocks.

Weak Cash Generation / Liquidity Risk

Volatile and recently near-zero free cash flow undermines the firm's ability to fund operations and necessary network capex internally. Chronic weak FCF raises reliance on external financing, increasing liquidity and refinancing risk during downturns or periods of heavy investment.

Zhongyu Gas Holdings Limited Business Overview & Revenue Model

Company Description

Zhongyu Energy Holdings Limited, an investment holding company, engages in the development, construction, and operation of natural gas projects in the People's Republic of China. The company is involved in the investment, operation, and management of city gas pipeline infrastructure; distribution of piped gas to residential, industrial, and commercial users; operation of compressed natural gas and liquefied natural gas vehicle filling stations; and sale of stoves, gas cooking appliances, wall-hung boilers, and related equipment, as well as trading of natural, coal, and liquefied petroleum gas. It also engages in the designing and consulting of energy projects; research and development of natural gas technology; sale of gas equipment and materials; gas pipeline construction; dangerous goods transportation; and provision of digital and information technology development and related consultancy services, as well as management and insurance services. The company was formerly known as Zhongyu Gas Holdings Limited and changed its name to Zhongyu Energy Holdings Limited in January 2022. Zhongyu Energy Holdings Limited was incorporated in 2001 and is headquartered in Central, Hong Kong.

How the Company Makes Money

Zhongyu Gas Holdings generates revenue primarily through the sale and distribution of natural gas to its customers, which include households, businesses, and industrial facilities. The company earns money by charging customers for the volume of gas consumed, as well as through connection fees for new customers who require access to its gas pipeline infrastructure. Additionally, Zhongyu Gas may derive income from the installation and maintenance of gas-related equipment and appliances. Significant partnerships with local governments and enterprises enhance its operational capabilities and expand its customer base, contributing to its revenue growth. The company's strategic focus on expanding its pipeline network and increasing its market presence in underserved regions also plays a crucial role in driving its earnings.

Zhongyu Gas Holdings Limited Financial Statement Overview

Summary

Zhongyu Gas Holdings Limited shows revenue growth, but declining profitability and cash flow metrics suggest challenges in cost management and operational efficiency. High leverage and liquidity concerns are significant risks.

Income Statement

Zhongyu Gas Holdings Limited has demonstrated consistent revenue growth over multiple years with the revenue growing from 8.14 billion in 2019 to 13.47 billion in 2024. However, gross profit margin has decreased from 23.45% in 2020 to 13.07% in 2024, indicating rising costs or pricing pressures. Net profit margin has also declined from 12.37% in 2020 to 1.09% in 2024, suggesting decreasing profitability. The EBIT and EBITDA margins have similarly shown a downward trend, indicating potential operational inefficiencies.

Balance Sheet

Debt-to-equity ratio is relatively high, increasing from 2.33 in 2020 to 1.75 in 2024, suggesting significant leverage. This could pose financial risks if not managed properly. Return on Equity (ROE) has significantly dropped from 17.56% in 2020 to 1.98% in 2024, reflecting decreased profitability relative to equity. The equity ratio is relatively stable, but the high debt levels remain a concern for financial stability.

Cash Flow

Free cash flow has been very volatile, with a notable decline in recent years, impacting the company's ability to fund operations without external financing. Operating cash flow has been positive historically, but the zero figures for 2024 suggest a significant reduction in operational cash generation. The lack of free cash flow in 2024 is alarming, indicating potential liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.79B	13.47B	13.64B	13.00B	11.34B	8.54B
Gross Profit	1.54B	1.76B	1.91B	1.97B	2.19B	1.95B
EBITDA	1.24B	1.63B	1.78B	1.73B	2.26B	2.09B
Net Income	152.82M	146.38M	246.72M	174.08M	1.19B	1.06B
Balance Sheet
Total Assets	26.38B	26.22B	26.43B	26.31B	26.67B	23.63B
Cash, Cash Equivalents and Short-Term Investments	2.58B	1.65B	1.52B	1.34B	1.87B	1.74B
Total Debt	13.30B	12.92B	12.22B	11.54B	11.34B	11.62B
Total Liabilities	17.77B	17.84B	17.74B	17.18B	17.16B	16.90B
Stockholders Equity	7.61B	7.39B	7.70B	8.13B	8.66B	6.02B
Cash Flow
Free Cash Flow	33.40M	350.31M	580.06M	188.16M	282.71M	12.83M
Operating Cash Flow	735.65M	1.05B	1.50B	1.40B	1.80B	1.89B
Investing Cash Flow	-184.71M	-778.54M	-964.44M	-1.32B	-1.63B	-1.88B
Financing Cash Flow	157.73M	-12.71M	-248.79M	-434.01M	-43.26M	-252.46M

Zhongyu Gas Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.78
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3633, the sentiment is Positive. The current price of 2.78 is below the 20-day moving average (MA) of 2.83, below the 50-day MA of 2.85, and below the 200-day MA of 3.58, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 52.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3633.

Zhongyu Gas Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2886	67 Neutral	HK$1.56B	7.61	8.96%	6.91%	-16.94%	-22.17%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
1083	61 Neutral	HK$13.48B	7.86	6.98%	6.38%	3.86%	30.34%
1635	59 Neutral	HK$19.12B	19.64	5.32%	1.17%	-6.02%	―
1600	59 Neutral	HK$2.88B	9.09	4.88%	4.94%	7.55%	-32.06%
3633	48 Neutral	HK$7.83B	51.35	2.04%	0.71%	-7.82%	-38.06%
1265	45 Neutral	HK$323.72M	-5.68	-3.93%	―	-11.42%	65.17%