Citigroup: Raises target price of HK & CHINA GAS (00003) to 7.5 Hong Kong dollars, maintains "neutral" rating.

Citigroup released a research report stating that it has raised the target price of HK & CHINA GAS (00003) by 7%, from HK$7 to HK$7.5, while maintaining a "neutral" rating. The company also faces challenges from factors such as the reduction in gross profit from retail natural gas sales units in mainland China. Considering that profits in 2025 are slightly lower than expected, the bank has lowered its net profit forecast for 2026-2027 by 5-7%. Citigroup stated that the reasons for maintaining a "neutral" rating are: 1) sustainable dividend of HK$0.35 per share, equivalent to an expected dividend yield of 4.8% in 2026; 2) lower business risks in Hong Kong, contributing half of its profits; 3) improvement in its advanced biofuel business (although the expected share of its total profits in 2026 is lower than 5%).