Hong Kong stock concept tracking | Hefei adjusts residential pipeline natural gas prices, steady growth in gas sector profits (with concept stocks)

Recently, the Development and Reform Commission of Hefei City issued a notice regarding the sale price of residential pipeline natural gas. Starting from October 15, 2024, the sales price of residential pipeline natural gas in Hefei City will be adjusted. After the adjustment, the first tier will increase from 2.72 yuan/cubic meter to 3.02 yuan/cubic meter, the second tier will increase from 2.96 yuan/cubic meter to 3.32 yuan/cubic meter, and the third tier will increase from 3.92 yuan/cubic meter to 4.53 yuan/cubic meter. The country has issued a natural gas upstream and downstream price linkage mechanism, and some cities have implemented price adjustment policies. A research report released by JPMorgan stated that gas stocks may benefit from improved profit prospects, cash flow, and regulatory environment. The report pointed out that CHINA GAS HOLD's performance in the first half of the year once again confirmed the industry's positive outlook, with steady growth in gas volume (up over 5% year-on-year), improved profit margins, and free cash flow. Although the decline in new pipeline business is greater than expected, with ENN ENERGY and RUN RAN profit margins down 30% to 50% year-on-year, as new pipeline business only accounts for less than 15% to about 10% of the industry's profits in 2024 and 2025, it means that future profitability will be better. In addition, most gas companies have committed to stable or increased dividends, making gas stocks attractive in terms of yield. Related Hong Kong stocks in the natural gas sector include: CHINA RES GAS (01193), ENN ENERGY (02688), CHINA RES GAS (01193), TIAN LUN GAS (01600), CHINA GAS HOLD (00384), etc.