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ENN Energy Holdings Ltd 02688

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Stock XHKG Rating as of
HKD 69.55 +1.90 (2.81%)
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As of Delayed Price Closed
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Company Report

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ENN Energy’s Operating Statistics Reaffirm Recovery Outlook for China Gas Utilities in 2024

Chokwai Lee

We think the China city gas sector is currently undervalued, but our preferred pick is ENN Energy, given its well-diversified earnings supported by its integrated energy, or IE, segment and value-added business, or VAB. Following the in-line first-quarter operating data from ENN, we keep its fair value estimate at HKD 88 per share. We believe the data supports our view of a gradual recovery for the industry and should be a positive read across for China Gas Holdings, or CGH, and China Resources Gas, or CRG, where we maintain our fair value estimates of HKD 12.50 and HKD 30.00 per share, respectively.

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Price vs Fair Value

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02688 is trading at a 23% discount.
Price
HKD 67.65
Fair Value
HKD 23.00
Uncertainty
High
1-Star Price
HKD 931.50
5-Star Price
HKD 64.10
Economic Moat
Rrrkqz
Capital Allocation
Fbdqjysz

Bulls Say, Bears Say

Bulls

China’s policies to encourage the use of cleaner energy, such as natural gas, will continue to benefit leading city gas operators such as ENN.

Bears

ENN’s profitability will be negatively affected by the potential removal of the one-off connection fees from its city gas operations.

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Trading Information

Previous Close Price
HKD 67.65
Day Range
HKD 67.80–70.60
52-Week Range
HKD 48.00–115.30
Bid/Ask
HKD 69.45 / HKD 69.55
Market Cap
HKD 78.21 Bil
Volume/Avg
2.8 Mil / 3.4 Mil

Key Statistics

Price/Earnings (Normalized)
10.68
Price/Sales
0.61
Dividend Yield (Trailing)
4.30%
Dividend Yield (Forward)
6.83%
Total Yield
4.63%

Company Profile

ENN Energy Holdings Ltd is primarily engaged in distributing and retailing natural gas. By year-end 2023, ENN owned 259 city gas projects in China, with annual gas sales volume of 33.6 billion cubic meters. Meanwhile, the aggregate number of connected piped gas residential households reached 29.8 million, with an average gas penetration rate of 65.2%. ENN Energy also has ventured into integrated energy business with 296 projects in operation.
Sector
Utilities
Industry
Utilities - Regulated Gas
Stock Style Box
Large Value
Total Number of Employees
34,907
Website
https://www.ennenergy.com

Competitors

Valuation

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Metric
02688
00392
00384
Price/Earnings (Normalized)
 10.685.2810.79
Price/Book Value
 1.620.350.73
Price/Sales
 0.610.350.46
Price/Cash Flow
 7.568.983.07
Price/Earnings
02688
00392
00384

Financial Strength

Metric
02688
00392
00384
Quick Ratio
 0.680.650.68
Current Ratio
 0.740.740.93
Interest Coverage
 14.243.412.46
Quick Ratio
02688
00392
00384

Profitability

Metric
02688
00392
00384
Return on Assets (Normalized)
 7.32%2.88%2.28%
Return on Equity (Normalized)
 18.73%7.19%6.19%
Return on Invested Capital (Normalized)
 11.56%4.40%3.40%
Return on Assets
02688
00392
00384
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