Citigroup: Upgrades HK & CHINA GAS (00003) to "Buy" with a target price raised to HKD 8.2.
The bank expects the gas companys profit to grow by 16-20% from 2026 to 2028.
Citi released a research report stating that it has upgraded the investment rating of HK & CHINA GAS (00003) from "Neutral" to "Buy," with the target price also raised by 9.3% from HKD 7.9 to HKD 8.2. Given the company's advanced biofuel business performance exceeded expectations, driving its first-half results above forecasts, the firm has upgraded the rating for the gas company.
The bank anticipates that strong market demand driven by the EU and UK sustainable aviation fuel ("SAF") mandates will support the ongoing improvement in the gas company's performance. It expects the gas company's earnings to grow by 16-20% from 2026 to 2028, primarily due to the increase in revenue from biofuel sales.
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