HK Stock Market Move | KUNLUN ENERGY (00135) rose more than 5% with JP Morgan pointing to two potential catalysts in the future: upgrade rating and target price hike.

KUNLUN ENERGY (00135) rose by more than 5%, reaching a 5% increase at the time of publication, closing at 7.98 Hong Kong dollars with a turnover of 92.9726 million Hong Kong dollars. In terms of news, Morgan Stanley released a research report stating that since July, KUNLUN ENERGY's performance has lagged behind the index by about 30%, possibly due to the rotation of the industry towards companies with higher beta values, and the spillover effects of recent oil price declines. The bank believes that the pullback in KUNLUN ENERGY's stock price provides an attractive entry point, as the stock is currently valued at a forecasted price-to-earnings ratio of less than 9 times for the next year, with a yield of over 5%. Two potential catalytic factors in the future include the possibility of global oil and natural gas price declines leading to a reduction in industry procurement costs, and the fact that around 70% of Kunlun's natural gas sales come from the industrial sector, which may benefit from potential stimulus measures in China. The company mentioned that Kunlun Energy's management has promised to increase the dividend payout ratio by 2 to 3 percentage points each year from 2023 to 2025, reaching 45%. With net cash of around 20 billion RMB on hand, the dividend payout ratio is expected to further increase, indicating a compound annual growth rate of over 10% in dividends per share during the period. Morgan Stanley upgraded Kunlun Energy from "Neutral" to "Buy", raising the target price from 8.25 Hong Kong dollars to 8.68 Hong Kong dollars, and making it the top pick in the industry along with ENN ENERGY.