China Gas Utilities 1H26 preview - weak results and consensus earnings cuts are likely; turning point yet to come

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China Gas Utilities 1H26 preview - weak results and consensus earnings cuts are likely; turning point yet to come

Asia Pacific Equity Research

16 July 2026

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China Gas Utilities

1H26 preview - weak results and consensus earnings

cuts are likely; turning point yet to come

We expect weak 1H26 results for China Gas utilities and the majority of the China

companies to report lower earnings yoy (Table 3) on the back of weak gas Power Equipment and Utilities

volumes, a decline in new connections and gas margins. We expect a round of AC Stephen Tsui, CFA

earnings cuts post results; our FY26-27E earnings forecasts are ~7% below (852) 2800-8592

consensus. Despite YTD underperformance and undemanding valuations (~6% stephen.tsui@jpmorgan.com

yield on average), we believe a turning point for the sector is yet to come as Vento Suen

winter gas prices may climb yoy, bringing uncertainty to winter gas margins. We (852) 2800-8546

remain selective on stocks and suggest to buy on dips post-results. Our top pick is vento.suen@jpmorgan.com

ENN Energy, as the company offers >7% yield in FY26E with guaranteed DPS Alan Hon

(HK$3/share). We see room for a cut to growth capex and improving FCF, and we (852) 2800-8573

think management may consider a buyback/raising DPS amid the significant alan.hon@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/

underperformance YTD, which is not factored in to the price. J.P. Morgan Broking (Hong Kong) Limited