Zhonghua Gas Holdings Ltd. (8246) AI Stock Analysis

• Market Cap: HK$521.14M
• Dividend Yield: N/A
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): ―
• Beta (1Y): -0.17
• Revenue Growth: -74.15%
• EPS Growth: 1.96%
• Country: HK
• Employees: 45
• Sector: Utilities
• Sector Strength: 65
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 592,203,000
• 10 Day Avg. Volume: 4,720,900
• 30 Day Avg. Volume: 1,770,966
• PEG Ratio: -0.02
• Price to Book (P/B): 4.47
• Price to Sales (P/S): 6.86
• P/FCF Ratio: -4.69
• 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: 44 Neutral
• Price Target: HK$0.08 ▲(1.25% Upside)
• Action: Reiterated Date: 01/20/26
• Date: Action: Reiterated 01/20/26

The score is primarily weighed down by poor financial performance (sharp revenue decline, sustained losses, and negative operating/free cash flow). Technical indicators are largely neutral and provide limited support, while valuation is also weak due to the negative P/E and lack of dividend data.

Positive Factors

Stable gas distribution business model

A core focus on piped gas and LNG distribution to households, businesses and industry is a durable, essential-service business. Utility-like demand and long service relationships support predictable baseline volumes and opportunities for multi-year contracts and regulated or quasi-regulated revenues over the medium term.

Pipeline network supports infrastructure revenue

Ownership/operation of pipeline infrastructure creates high barriers to entry and the potential for recurring infrastructure and maintenance revenues. Once utilisation recovers, fixed-asset scale can translate into durable cash flows and customer lock-in from technical and regulatory switching costs.

Reduction in total debt in latest year

Lowering absolute debt reduces interest burden and improves financial flexibility, which is material for a loss-making utility business. Improved debt metrics help preserve liquidity runway, support negotiations with lenders, and provide optionality for restructuring or capital investments without immediate refinancing stress.

Negative Factors

Sharp multi-year revenue decline

A more than 75% revenue contraction over three years materially weakens scale economics, reduces margins and bargaining power, and raises fixed-cost burden per unit. Sustained top-line shrinkage undermines reinvestment capacity and makes recovery harder absent structural market or contractual shifts.

Persistently negative profitability and margins

Consistent negative gross and net margins indicate the core operations fail to cover direct and operating costs. This erodes equity, damages return on capital, and forces either cost restructuring or new revenue lines. Long-term viability depends on reversing these structural margin deficits.

Negative operating and free cash flow

Sustained negative operating and free cash flow means management must rely on external financing to fund operations and capex. That increases refinancing risk, limits ability to maintain pipelines and services, and constrains investment in growth or safety upgrades unless cash generation is restored.

Zhonghua Gas Holdings Ltd. Business Overview & Revenue Model

Company Description

Zhonghua Gas Holdings Limited, an investment holding company, provides integrated new energy services primarily in the People's Republic of China. Its New Energy Business segment provides integrated new energy services, including technological development, construction, and consultancy services for heat supply and coal-to-natural gas conversion. This segment also supplies liquefied natural gas, as well as trades in new energy related industrial products. The company's Property Investments segment leases investment properties. It also provides money lending and corporate services. The company was formerly known as Northern New Energy Holdings Limited and changed its name to Zhonghua Gas Holdings Limited in September 2018. Zhonghua Gas Holdings Limited was incorporated in 2011 and is based in Wan Chai, Hong Kong.

How the Company Makes Money

Zhonghua Gas Holdings Ltd. generates revenue primarily through the sale of natural gas to its customers, which includes residential households, commercial establishments, and industrial clients. The company has established a network of pipelines that facilitate the distribution of gas, allowing it to charge for both the supply of gas and the infrastructure services involved in its delivery. Additionally, Zhonghua may earn revenue from the installation and maintenance of gas appliances and equipment, as well as from service contracts with its customers for ongoing support. Strategic partnerships with local governments and other entities can also play a significant role in expanding its market reach and enhancing its revenue streams.

Zhonghua Gas Holdings Ltd. Financial Statement Overview

Summary

Very weak fundamentals: revenue fell sharply (HK$420.66m in 2021 to HK$89.19m in 2024), profitability is deeply negative (negative gross and net margins with negative EBIT/EBITDA), and 2024 operating/free cash flow are negative. Debt reduction is a modest positive, but equity has been shrinking and ROE remains negative due to persistent losses.

Income Statement

The income statement reveals a significant decline in revenue, dropping from HK$420.66 million in 2021 to HK$89.19 million in 2024. The gross profit margin is negative, indicating cost issues, and the net profit margin is also deeply negative, showing consistent losses. The EBIT and EBITDA margins are concerning, with EBIT heavily negative and consistent negative NET income over the years, indicating poor operational performance and inability to cover operating expenses.

Balance Sheet

The company's balance sheet shows some strengths with a decrease in total debt from 2023 to 2024, improving the debt-to-equity ratio. However, the equity ratio has been declining due to shrinking stockholders' equity. The return on equity is negative due to consistent net losses. The overall stability is affected by high liabilities and negative net income.

Cash Flow

The cash flow statement indicates severe issues with negative operating and free cash flows in 2024, suggesting the company is struggling to generate cash from its core operations. The free cash flow to net income ratio is poor, and the operating cash flow to net income ratio is negative, reflecting operational inefficiencies and financial distress.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.71M	89.19M	186.65M	200.53M	420.66M	243.70M
Gross Profit	2.08M	3.54M	-6.79M	-7.95M	-7.03M	-4.12M
EBITDA	-32.60M	-38.51M	11.23M	11.08M	-194.44M	-135.45M
Net Income	-33.94M	-49.10M	-6.66M	-5.25M	-191.31M	-131.02M
Balance Sheet
Total Assets	357.05M	406.03M	349.67M	346.73M	358.92M	595.03M
Cash, Cash Equivalents and Short-Term Investments	11.50M	69.10M	196.57M	38.75M	60.77M	85.48M
Total Debt	39.08M	52.97M	95.17M	88.00M	84.62M	103.41M
Total Liabilities	170.54M	233.46M	210.43M	203.78M	214.23M	240.48M
Stockholders Equity	149.94M	136.71M	104.76M	109.79M	115.04M	302.63M
Cash Flow
Free Cash Flow	-6.96M	-130.43M	162.78M	-18.20M	-22.61M	-25.60M
Operating Cash Flow	-5.75M	-129.69M	163.23M	-18.14M	-10.87M	-24.92M
Investing Cash Flow	-1.20M	575.00K	342.00K	191.00K	-4.07M	-999.00K
Financing Cash Flow	11.03M	2.05M	-6.50M	-8.02M	-7.86M	92.57M

Zhonghua Gas Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.08
• 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:8246, the sentiment is Positive. The current price of 0.08 is below the 20-day moving average (MA) of 0.79, below the 50-day MA of 0.71, and below the 200-day MA of 0.82, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 66.46 is Neutral, neither overbought nor oversold. The STOCH value of 52.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8246.

Zhonghua Gas Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
1726	53 Neutral	HK$1.44B	-13.79	-68.32%	―	26.40%	-6.44%
6829	51 Neutral	HK$751.68M	14.81	2.76%	―	22.30%	48.48%
8021	49 Neutral	HK$143.67M	0.71	-1.80%	―	-3.98%	37.50%
8246	44 Neutral	HK$521.14M	-4.96	-42.45%	―	-74.15%	1.96%
1683	41 Neutral	HK$395.64M	-236.90	-8.55%	―	-37.55%	-1727.78%