Lyon: ENN ENERGY (02688) privatization bid falls through, valuation still attractive, target price lowered to HKD 58.5.

Lyon issued a research report stating that ENN ENERGY (02688)'s parent company, ENN Natural Gas (600803.SH), has withdrawn its privatization proposal, triggering a recent decline in stock prices. The bank believes that the stock price has fallen to an attractive level, forecasting a dividend yield of 7% in 2026. The target price has been lowered from HK$75 to HK$58.5, with the current valuation equivalent to an attractive forecasted P/E ratio of 6.3 times for this year. The bank maintains its "outperform" rating. The bank has lowered its profit forecast for Newo for the next two years by 5% and 22%, respectively. Lyon expects ENN ENERGY's net profit to increase by 18% to about 6.9 billion RMB in 2026, mainly due to the contribution of wholesale gas gross profit of 1.4 billion RMB.