China Gas Holdings Limited: 30% DPS cut points to further downside

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China Gas Holdings Limited: 30% DPS cut points to further downside

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China Gas Holdings Limited

30% DPS cut points to further downside

Reiterate Rating: UNDERPERFORM | PO: 4.10 HKD | Price: 5.65 HKD

30% DPS cut points to further downside 29 June 2026

China Gas FY26 EPS dropped 16% YoY, in line. Though some investors may have Equity

expected the 30% DPS cut, we believe it is not fully priced in. China Gas now guides DPS

of no less than HKD0.35/shr (sustainability pending on strict CAPEX compression). We

Key Changesreiterate Underperform with a lower PO of HKD4.1/shr, implying 8.5% dividend yield.

EPS largely in line; Value-added business EBIT dropped 7% (HK$)Price Obj. Previous5.00 Current4.10

China Gas reported HKD2.7bn FY26 earnings. Excluding the HKD140mn one-off deferred 2027E EBITDA (m) 9,038.9 8,896.0

tax asset write down, core profit was HKD2.86bn. Retail gas volume was flat YoY. Dollar 2028E EBITDA (m) 9,417.2 9,268.4

margin improved by 1cent YoY. Connection volume dropped 19% YoY. Value-added EBIT 2029E EBITDA (m) NA 9,637.1

dropped 7% YoY, due to weak consumption, declining new connections, and rising

product costs. Other income dropped 48% YoY due to lower government subsidies. Cissy Guan >>

Growth plan to unlock management share awards ResearchMerrill LynchAnalyst(Hong Kong)

+852 3508 6483

Shareholders approved a Share Award Scheme to grant 462mn new shares to five cissy.guan@bofa.com

executive directors, with vesting linked to 15% annual core profit growth in FY27-31. Gary Tsang >>

More details in our 5/28 report. For FY27, China Gas guides 1) flattish gas sales business Research Analyst

Merrill Lynch (Hong Kong)

(though volume dropped 1% YoY, and dollar margin dropped 6cents YoY in May); 2) 12- gary.tsang@bofa.com