[ET Net News Agency, 30 July 2019] Daiwa Research lifted its target price for China
Resources Gas (CRG)(01193) to HK$43 from HK$42 and maintained its "outperform" rating.
The research house believes CRG's 6% share-price correction since 15 July has factored
in the concerns of a likely slow low-teens YoY profit growth for 1H amid an industrial
activities slowdown.
Daiwa thinks that CRG is likely to see a strong 1.1pp expansion in its 2019-21 yield
versus city-gas peers' 0.4-0.7pp. Given CRG's rising FCF on a stable long-term HK$6-8bn pa
city-gas capex, it believes CRG has entered a harvesting stage and will follow Hong Kong
and China Gas (00003) to achieve long-term 10% DPS growth pa, and become a high-rate
corporate bond-like investment. (KL)