PDF《Equity Research》

3 month average vol.

3 个月平均成交股数 ('

000) 10,071.9 FY17 Net gearing (%) FY17 净负债/股东资金 (%) 38.3

52 Weeks high/low (HK$)

52 周高/低15.273 / 12.273 FY17 Est. NAV (HK$) FY17 每股估值(港元) 21.3 Source: the Company, Guotai Junan International. Company Report See the last page for disclaimer Page

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6 [ T a b l e _ R i g h t M a r

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14 September

2017 [ T a b l e _ R i g h t M a r

2 ] HK and China Gas 中华煤气 (00003 HK) [Table_PageHeader] HK and China Gas (00003 HK) The

2017 interim results of the Company were generally in line with market consensus and our expectations. Total revenue of the Company increased 8.96% yoy to HK$ 15.43 billion, net profit attributable to shareholders increased 3.26% yoy to HK$ 4.47 billion. Total sale of gas in Hong Kong increased by 0.8% yoy, but the sale of cooking sets decreased slightly. Total sale of gas in mainland China increased by 13% yoy to 9.72 billion m

3 and total customers increased by about 10% to 24.15 million. Gas distribution and related businesses, including sale of gas, connection services, sale of gas appliances and maintenance services, are the core business areas of the Company. In the first half of 2017, these businesses contributed 90.0% of total revenue of the Company and 91.5% of EBITDA. Hong Kong gas business is the cornerstone of the Company and contributed 47.5% of total EBITDA in 1H2017. In the first half of 2017, gas distribution business and water business in mainland China contributed 44.0% of total EBITDA. The Company also benefited greatly from its associates and joint ventures, which are mainly engaged in gas distribution business and property development. The associates and joint ventures which engage in gas distribution business in mainland China contributed HK$ 1.29 billion of profit in the first half of 2017;

the associates and joint ventures engaged in property business contributed HK$ 0.86 billion of profit in the first half of 2017. Figure-1: Sale of Piped Gas in Hong Kong Figure-2: Sale of Gas of in Mainland China Source: the Company, Guotai Junan International. Source: the Company, Guotai Junan International. Maintain operating profit assumptions contributed by Hong Kong gas business unchanged. Gas distribution business of the Company in Hong Kong generally remained steady over the past several years. Total number of customers of the Company in Hong Kong increased steadily over the past

8 years and reached 1.87 million in 1H2017, but the growth rate has always been rather small. Total sale of piped gas increased 0.8% yoy to 15.9 billion MJ in 1H2017, which was generally in line with our estimation. Hong Kong'

s gas distribution market is a highly mature and stable market, mainly consisting of residential and commercial customers, making it normal to have a stable customer group and stable gas consumption. Total sale of cooking sets of the Company in Hong Kong was also rather stable. The sale of cooking sets is mainly from renewal demand of its customers, and the Company holds great competitive advantages comparing to other home appliance brands. With a stable customer group and a stable renewal rate, the sale of cooking sets of the Company in Hong Kong has also enjoyed stable demand. Although the Hong Kong gas distribution market is not expected to record significant growth in the future, it is expected to continue to offer stable operating profit to the Company. The sale of gas and cooking sets in Hong Kong in the first half of

2017 was generally in line with our estimation, so we maintain operating profit assumptions contributed by Hong Kong gas business unchanged. Revise up natural gas sales assumptions of the Company. According to the National Development and Reform Commission (NDRC), natural gas consumption in mainland China accelerated in the first half year of 2017, increasing 15.2% yoy to 114.6 billion m