HK Stock Market Move | CHINA RES GAS(01193) rises over 4% again, industry benefits from falling costs and rising prices, double positive effect for residents. Morgan Stanley points out that its profit forecast is more favorable.

CHINA RES GAS (01193) rose by more than 4%, as of the time of writing, it increased by 4.11% to HKD 30.45, with a turnover of HKD 252.641 million. Shenwan Hongyuan Group pointed out that under the dual benefits of cost reduction and residents' willingness to pay, the non-GAAP/core profitability of urban gas enterprises has generally shown a significant year-on-year improvement. Some gas trading companies have seen a decrease in profits or a slowing growth rate due to a drop in international LNG trading margins. The contribution of the connection business to the profits of urban gas companies continues to decline, but the impact in the future is limited. The rapid development of comprehensive energy and value-added businesses is expected to enhance the long-term performance of urban gas companies. Morgan Stanley issued a research report, raising the target price of CHINA RES GAS by 2% from HKD 33.4 to HKD 34.1, mainly reflecting better profit forecasts, and maintaining a "hold" rating. Morgan Stanley stated that they have raised the profit forecasts for CHINA RES GAS for 2024-2026 by 2%, taking into account the actual performance in the first half of 2024, mainly due to better profit margin forecasts and extending the valuation to 2025 at a P/E ratio of 13 times, down from the previous 14 times for 2024.