[ET Net News Agency, 17 April 2020] Nomura lowered its target price for China Gas
Holdings (CGH)(00384) to HK$31 from HK$38, given its muted earnings growth, and maintained
its "buy" rating.
The research house lowered its FY2020/21 earnings forecasts further by 5%/6% for CGH. In
a recent call, management acknowledged that the COVID-19 impact is bigger than expected.
According to management, CGH recorded 13%/12% volume declines in 2-month 2020/March 2020.
Nomura also revised down its FY2020/21 dollar margin estimates by CNY0.01/0.2 per cubic
meter to CNY0.60/0.59. But Nomura sees increasing profit contribution from value-added
services. It also expects the government's ongoing coal-to-gas replacement policy to drive
natural gas consumption in the long term. (KL)