The Bull Case For ENN Energy Holdings (SEHK:2688) Could Change Following Hang Seng China Index Exit

• Earlier this month, ENN Energy Holdings Limited was removed from the Hang Seng China Enterprises Index, ending its inclusion in one of Hong Kong’s key benchmarks for mainland Chinese companies.
• This index removal can alter the company’s investor base, as passive funds tracking the benchmark may rebalance their holdings, affecting liquidity and trading patterns.
• Against this backdrop of index exclusion and potential shifts in passive fund flows, we’ll examine how this development reshapes ENN Energy’s investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

ENN Energy Holdings Investment Narrative Recap

To own ENN Energy, you need to be comfortable with a slower growing but established gas utility that is balancing earnings pressure with ongoing capital returns. The removal from the Hang Seng China Enterprises Index may shift some passive ownership, but it does not appear to change the key near term catalyst, which is progress on the planned take-private and delisting, or the main risks around domestic economic softness and exposure to upstream pricing.

The most relevant recent development is the March 2025 proposal for Xinneng (Hong Kong) Energy Investment to acquire the remaining stake in ENN Energy and subsequently delist the company. This potential transaction sits at the center of the investment story in the short term, intersecting with concerns about revenue pressures, dividend sustainability and how minority shareholders may be treated if earnings remain under strain.

Yet against all of this, investors still need to be aware that...

Read the full narrative on ENN Energy Holdings (it's free!)

ENN Energy Holdings' narrative projects CN¥124.8 billion revenue and CN¥8.2 billion earnings by 2028. This requires 4.0% yearly revenue growth and about CN¥2.4 billion earnings increase from CN¥5.8 billion today.

Uncover how ENN Energy Holdings' forecasts yield a HK$72.68 fair value, in line with its current price.

Exploring Other Perspectives

Two fair value estimates from the Simply Wall St Community span a wide range, from HK$72.68 up to HK$239.72 per share, showing just how far apart individual views can be. Set against concerns about weaker wholesale gas profits and domestic economic pressures, this spread underlines why you may want to compare several independent opinions before forming your own view on ENN Energy’s prospects.

Explore 2 other fair value estimates on ENN Energy Holdings - why the stock might be worth over 3x more than the current price!

Build Your Own ENN Energy Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ENN Energy Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free ENN Energy Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ENN Energy Holdings' overall financial health at a glance.

No Opportunity In ENN Energy Holdings?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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