01083 Overview

Urban Gas Utility Sector Challenges: The urban gas utility sector is experiencing a slowdown in gas sales growth and a decline in new users, although profit margin expansion has mitigated some negative impacts, according to HSBC Research.

Sales and User Projections: HSBC Research anticipates stable retail gas sales in the second half of 2025, but expects a 16% year-over-year decrease in new users for TG SMART ENERGY in 2025, with gas prices likely increasing due to a hike in August 2024.

Broker Ratings and Target Price Adjustments: Daiwa has upgraded the CN gas industry rating to Neutral and HK & CHINA GAS to Outperform, while maintaining a Buy rating on TG SMART ENERGY but lowering its target price from HKD4.7 to HKD4.

Earnings Forecast Revisions: HSBC Research has revised down its earnings forecasts for TG SMART ENERGY by 6-7% and for HK & CHINA GAS by 7-8% due to reduced contributions from the renewable energy sector.

Citi's Negative Catalyst Watch: Citi has placed TG SMART ENERGY (01083.HK) under a 30-day negative catalyst watch, anticipating a reduction in earnings estimates that could pressure the stock price.

Earnings Estimates Adjustment: The bank has lowered its earnings forecasts for 2025-27 by 7.5-8.3% due to unexpected reductions in China's grid electricity tariffs and a decline in retail gas sales volume, despite an increase in unit profit margins.

Target Price Reduction: TG SMART ENERGY's target price has been cut by 13% from HKD4.6 to HKD4, while maintaining a Neutral rating.

Short Selling Activity: The company has experienced short selling of $1.18 million, with a short selling ratio of 26.420%.

Earnings Forecast Revision: Citi Research has lowered its earnings forecasts for HK & CHINA GAS for 2025-2027 by 2-5%, primarily due to reduced contributions from its subsidiary TG SMART ENERGY and anticipated foreign exchange losses.

Target Price and Rating: Despite the earnings forecast revision, Citi maintains a target price of $7 for HK & CHINA GAS and rates it as Neutral, noting that its 2025 earnings forecast is 8% below market consensus.

Dividend Concerns: The broker estimates that HK & CHINA GAS will maintain its dividend per share at $0.35, resulting in a dividend yield of 5%, which is a key concern for investors.

Sector Preferences: In the Hong Kong utilities sector, Citi Research prefers GUANGDONG INV, rating it as Buy with a projected 2025 dividend yield of 4.9%.

Stock Performance: TG SMART ENERGY (01083.HK) opened 6.51% lower at $4.02, with a short selling volume of $3.92 million and a ratio of 11.729%.

Interim Results Announcement: The company reported a turnover decline of 0.6% year-on-year to $10.437 billion, while net profit increased by 2.1% to $758 million.

Earnings Per Share and Dividend: The earnings per share (EPS) was recorded at 21.8 cents, and an interim dividend per share (DPS) of $5 cents was declared for the first time, compared to no dividend last year.

Market Data Note: The stock quote is delayed by at least 15 minutes, and short selling data is as of August 15, 2025.

Interim Results Overview: TG SMART ENERGY reported a 0.6% decline in turnover to $10.437 billion for the period ending June 2025, while net profit increased by 2.1% to $758.391 million, resulting in an EPS of $21.8 cents.

Dividend Declaration: The company declared an interim dividend of $5 cents per share for the first time, contrasting with no dividend issued during the same period last year.