发帖
雷达卡
Supply increasing to meet demand; this
should support long-term sales growth
􀀗 Price reform – pass-through mechanism
means limited impact on returns
􀀗 Top picks – Xinao Gas and China Gas;
we are well above 2010-11e consensus
Demand exceeds supply. In China, demand for gas far
exceeds domestic supply, so the government is increasing
imports and investing in more long-distance pipelines and
LNG terminals. As supply improves beyond 2010, the
development of city gas projects should accelerate,
supporting earnings growth.
Property market a plus. The recovery in the property
market helped operators to increase new connection rollouts
in 1H09. Supported by the completion of large-scale, lowcost
housing projects (also known as economic housing)
starting in 2H09, we expect new connection rollouts to pick
up further.
Price reform. We expect price reform to be introduced
soon. However, the cost pass-through mechanism means the
impact on operators’ returns will be limited.
Top picks. We increase our target prices for most city gas
operators to reflect increased earnings forecasts based on: 1)
rise in new connection rollouts; 2) higher forecast for piped
gas sales; and 3) higher terminal growth rate for DCF
valuation. Our top picks are the pure gas players, China Gas
and Xinao Gas. For Xinao Gas, we are 8.6% above
consensus for 2010 and 15% for 2011; for China Gas, we are
19.3% above consensus for 2010 and 35.1% for 2011.
京公网安备 11010802022788号
