HK Stock Market Move | CHINA RES GAS (01193) fell more than 3% as JP Morgan pointed out the company's premium valuation compared to its industry peers and predicted that its earnings and gas volume would lag behind its competitors.

CHINA RES GAS (01193) fell by more than 3%, dropping 3.25% to HK$26.75 at the time of writing with a trading volume of 1.23 billion Hong Kong dollars. According to reports, Morgan Stanley released a research report stating that market forecasts for gas growth have decreased, and CHINA GAS HOLD has underperformed the market so far this year. However, the bank believes that market profit expectations for the industry are still too high, so it recommends reassessing the industry after the earnings announcement. It also suggests buying on dips when stock prices react negatively to performance. Morgan Stanley emphasizes that due to CHINA RES GAS's premium valuation compared to its peers, and the expectation that its profit and gas volume growth will lag behind peers like ENN ENERGY, it has downgraded its rating from "hold" to "neutral". The top choices in the industry are ENN ENERGY and KUNLUN ENERGY. Previously, Citigroup lowered its net profit forecasts for CHINA RES GAS for 2024 to 2026 by 8.3%, 9.5%, and 9.2%, reflecting a decrease in expectations for its retail natural gas sales growth. The average annual growth rate for 2024 to 2025 is forecasted at 3%, lower than the company's target of 6% growth last year, mainly due to slower growth in the industrial sector. The company reports its earnings in Hong Kong dollars, which are affected by exchange rate fluctuations.