China Gas Shares Fall Sharply After Fiscal Year Results
By Clarence Leong
Shares of China Gas Holdings Ltd. fell sharply on Monday morning trade, after it reported a 27% decline in its fiscal year net profit.
Shares fell 9.4% to HK$10.58, on track for its biggest one-day drop in more than three months. It was down 35% for the year.
The Hong Kong-headquartered company posted 7.66 billion Hong Kong dollars (US$975.9 million) net profit for the year ended March 31, compared with HK$10.48 billion a year earlier, it said in a late Friday filing. Total revenue for the full year rose 26% to HK$88.23 billion.
Earnings were dragged by slower new gas pipeline connections due to disruptions caused by the Covid-19 restrictions in China. The company added 2.9 million new household connections in the fiscal year, a 42% decline from the prior year. Meanwhile, natural gas sales grew 18%, which the company said was supported by environmental policies and the transition to a low-carbon economy.
Citigroup analysts said the results came in below their estimate and lowered the target price on the stock to HK$14.50 from HK$15.00. However, it still maintains a buy rating on the stock, as it believes the investment risk is lower, given that the company is focusing more on cash flow.
Write to Clarence Leong at clarence.leong@wsj.com
(END) Dow Jones Newswires
June 26, 2022 22:53 ET (02:53 GMT)
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