BOCI Research: First initiated HK & CHINA GAS (00003) with a "Buy" rating and a target price of HK$7.38.

Bank of China International has issued a research report stating that it has initiated a "buy" rating on HK & CHINA GAS (00003) with a target price of 7.38 Hong Kong dollars. All factors will enable the company to maintain its dividend per share, even though its payout ratio has exceeded 100%. The bank believes that the stock is a good choice for income investors in a low interest rate environment, with a dividend yield of 5.5%. The bank expects the company's profit to grow by 3% to 6% year-on-year in the coming years, with renewable energy and mainland gas distribution business as the main growth drivers. The bank predicts that after turning losses into profits last year, the operating profit of the renewable energy sector will grow at a compound annual growth rate of 136% from this year to 2026. Its Hong Kong gas business provides a large, steady, and stable profit base, while its green energy business provides additional growth potential through the greening of shipping and aviation fuels.