Hong Kong and China Gas

SEHK:3

Snowflake Description

Solid track record average dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.

SEHK

HK$304B

Market Cap

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Last updated 2019/05/26 12:37

Company description

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas in Hong Kong and Mainland China. The last earnings update was 38 days ago. More info.

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3 Share Price and Events

7 Day Returns

4.3%

SEHK:3

2.9%

HK Gas Utilities

-2.4%

HK Market

1 Year Returns

27.4%

SEHK:3

2.8%

HK Gas Utilities

-16.5%

HK Market

3 Shareholder Return

	7 Day	30 Day	90 Day	1 Year	3 Year	5 Year
Hong Kong and China Gas (3)	4.3%	5.8%	11.1%	27.4%	78.4%	70%
HK Gas Utilities	2.9%	0.1%	-2.2%	2.8%	70.2%	37.8%
HK Market	-2.4%	-9%	-8.1%	-16.5%	19.3%	4.9%

1 Year Return vs Industry and Market

3 outperformed the Gas Utilities industry which returned 2.8% over the past year.
3 outperformed the Market in Hong Kong which returned -16.5% over the past year.

Price Volatility

Industry

5yr Volatility vs Market

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3 Value

Is Hong Kong and China Gas undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

Here we compare the current share price of Hong Kong and China Gas to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Hong Kong and China Gas.

SEHK:3 Discounted Cash Flow Data Sources
Data Point	Source	Value
Valuation Model		2 Stage Free Cash Flow to Equity
Levered Free Cash Flow	Average of 11 Analyst Estimates (S&P Global)	See below
Discount Rate (Cost of Equity)	See below	7.3%
Perpetual Growth Rate	10-Year HK Government Bond Rate	2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:3
Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year HK Govt Bond Rate	2%
Equity Risk Premium	S&P Global	6.7%
Gas Utilities Unlevered Beta	Simply Wall St/ S&P Global	0.41
Re-levered Beta	= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) = 0.415 (1 + (1- 25%) (13.09%))	0.635
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	0.8
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 2% + (0.8 * 6.65%)	7.32%

Discounted Cash Flow Calculation for SEHK:3 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Hong Kong and China Gas is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

SEHK:3 DCF 1st Stage: Next 10 year cash flow forecast
	Levered FCF (HKD, Millions)	Source	Present Value Discounted (@ 7.32%)
2019	4,268.92	Analyst x4	3,977.64
2020	4,849.40	Analyst x5	4,210.20
2021	5,971.00	Analyst x2	4,830.24
2022	6,873.96	Est @ 15.12%	5,181.26
2023	7,642.92	Est @ 11.19%	5,367.79
2024	8,287.33	Est @ 8.43%	5,423.23
2025	8,826.25	Est @ 6.5%	5,381.79
2026	9,281.06	Est @ 5.15%	5,272.97
2027	9,671.61	Est @ 4.21%	5,119.92
2028	10,014.61	Est @ 3.55%	4,939.76
Present value of next 10 years cash flows			HK$49,704.79

SEHK:3 DCF 2nd Stage: Terminal Value
	Calculation	Result
Terminal Value	= FCF₂₀₂₈ × (1 + g) ÷ (Discount Rate – g) = HK$10,014.61 × (1 + 2%) ÷ (7.32% – 2%)	HK$192,015.08
Present Value of Terminal Value	= Terminal Value ÷ (1 + r)¹⁰ = HK$192,015.08 ÷ (1 + 7.32%)¹⁰	HK$94,712.50

SEHK:3 Total Equity Value
	Calculation	Result
Total Equity Value	= Present value of next 10 years cash flows + Terminal Value = HK$49,704.79 + HK$94,712.50	HK$144,417.29
Equity Value per Share (HKD)	= Total value / Shares Outstanding = HK$144,417.29 / 15,386.41	HK$9.39

SEHK:3 Discount to Share Price
	Calculation	Result
Value per share (HKD)	From above.	HK$9.39
Current discount	Discount to share price of HK$19.78 = -1 x (HK$19.78 - HK$9.39) / HK$9.39	-110.7%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

The current share price of Hong Kong and China Gas is above its future cash flow value.

Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Hong Kong and China Gas's earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are Hong Kong and China Gas's earnings available for a low price, and how does this compare to other companies in the same industry?

Raw Data

SEHK:3 PE (Price to Earnings) Ratio Data Sources
Data Point	Source	Value
Earnings Per Share *	Company Filings (2018-12-31) in HKD	HK$0.61
SEHK:3 Share Price **	SEHK (2019-05-24) in HKD	HK$19.78
Hong Kong Gas Utilities Industry PE Ratio	Median Figure of 13 Publicly-Listed Gas Utilities Companies	17.71x
Hong Kong Market PE Ratio	Median Figure of 1,478 Publicly-Listed Companies	10.99x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Hong Kong and China Gas.

SEHK:3 PE (Price to Earnings) Ratio Calculation
	Calculation	Outcome
PE Ratio	= SEHK:3 Share Price ÷ EPS (both in HKD) = 19.78 ÷ 0.61	32.68x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong and China Gas is overvalued based on earnings compared to the HK Gas Utilities industry average.
Hong Kong and China Gas is overvalued based on earnings compared to the Hong Kong market.

Price based on expected Growth

Does Hong Kong and China Gas's expected growth come at a high price?

Raw Data

SEHK:3 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point	Source	Value
PE Ratio	See PE Ratio Section	32.68x
Net Income Annual Growth Rate	See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts	4.1%per year
Hong Kong Gas Utilities Industry PEG Ratio	Median Figure of 8 Publicly-Listed Gas Utilities Companies	1.19x
Hong Kong Market PEG Ratio	Median Figure of 462 Publicly-Listed Companies	0.77x

*Line of best fit is calculated by linear regression .

SEHK:3 PEG (Price to Earnings to Growth) Ratio Calculation
	Calculation	Outcome
PEG Ratio	= PE Ratio ÷ Net Income Annual Growth Rate = 32.68x ÷ 4.1%	7.97x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong and China Gas is poor value based on expected growth next year.

Price based on value of assets

What value do investors place on Hong Kong and China Gas's assets?

Raw Data

SEHK:3 PB (Price to Book) Ratio Data Sources
Data Point	Source	Value
Book Value per Share	Company Filings (2018-12-31) in HKD	HK$4.06
SEHK:3 Share Price *	SEHK (2019-05-24) in HKD	HK$19.78
Hong Kong Gas Utilities Industry PB Ratio	Median Figure of 14 Publicly-Listed Gas Utilities Companies	1.45x
Hong Kong Market PB Ratio	Median Figure of 2,157 Publicly-Listed Companies	0.94x

SEHK:3 PB (Price to Book) Ratio Calculation
	Calculation	Outcome
PB Ratio	= SEHK:3 Share Price ÷ Book Value per Share (both in HKD) = 19.78 ÷ 4.06	4.88x

* Primary Listing of Hong Kong and China Gas.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Hong Kong and China Gas is overvalued based on assets compared to the HK Gas Utilities industry average.

Value checks

We assess Hong Kong and China Gas's value by looking at:

Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
Is the PE ratio less than the market average, and/ or less than the Gas Utilities industry average (and greater than 0)? (2 checks)
Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
Is the PB ratio less than the Gas Utilities industry average (and greater than 0)? (1 check)

Full details on the Value part of the Simply Wall St company analysis model.

3 Future Performance

How is Hong Kong and China Gas expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!

4.1%

Expected annual growth in earnings.

Earnings growth vs Low Risk Savings

Is Hong Kong and China Gas expected to grow at an attractive rate?

Hong Kong and China Gas's earnings growth is expected to exceed the low risk savings rate of 2%.

Growth vs Market Checks

Hong Kong and China Gas's earnings growth is positive but not above the Hong Kong market average.
Hong Kong and China Gas's revenue growth is positive but not above the Hong Kong market average.

Annual Growth Rates Comparison

Raw Data

SEHK:3 Future Growth Rates Data Sources
Data Point	Source	Value (per year)
SEHK:3 Future Earnings Growth Rate	Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts	4.1%
SEHK:3 Future Revenue Growth Rate	Line of Best Fit* through Consensus Estimate Revenue of 11 Analysts	7.2%
Hong Kong Gas Utilities Industry Earnings Growth Rate	Market Cap Weighted Average	10.2%
Hong Kong Gas Utilities Industry Revenue Growth Rate	Market Cap Weighted Average	10.6%
Hong Kong Market Earnings Growth Rate	Market Cap Weighted Average	11.3%
Hong Kong Market Revenue Growth Rate	Market Cap Weighted Average	10.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations

Raw Data

SEHK:3 Analysts Growth Expectations Data Sources
Data Point	Source	Value
Past Financials	Company Filings (4 months ago)	See Below
Future Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below

All numbers in HKD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:3 Future Estimates Data
Date (Data in HKD Millions)	Revenue	Cash Flow	Net Income *	Avg. No. Analysts
2021-12-31	49,282	10,812	10,454	5
2020-12-31	44,189	10,282	9,805	10
2019-12-31	41,644	8,719	9,041	8

SEHK:3 Past Financials Data
Date (Data in HKD Millions)	Revenue	Cash Flow	Net Income *
2018-12-31	39,073	9,439	9,313
2018-09-30	37,680	9,291	8,928
2018-06-30	36,287	9,142	8,543
2018-03-31	34,382	8,833	8,384
2017-12-31	32,477	8,524	8,225
2017-09-30	31,151	8,505	7,854
2017-06-30	29,826	8,485	7,482
2017-03-31	29,191	8,477	7,411
2016-12-31	28,557	8,469	7,341
2016-09-30	28,614	8,503	7,361
2016-06-30	28,671	8,536	7,380
2016-03-31	29,131	8,406	7,341

*GAAP earnings excluding extraordinary items.

High Growth Checks

Hong Kong and China Gas's earnings are expected to grow by 4.1% yearly, however this is not considered high growth (20% yearly).
Hong Kong and China Gas's revenue is expected to grow by 7.2% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Raw Data

SEHK:3 Past and Future Earnings per Share
Data Point	Source	Value
Past Financials	Company Filings (4 months ago)	See Below
Future Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below

All data from Hong Kong and China Gas Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:3 Future Estimates Data
Date (Data in HKD Millions)	EPS *	EPS High Estimate	EPS Low Estimate	Avg. No. Analysts
2021-12-31	0.67	0.75	0.57	5.00
2020-12-31	0.63	0.70	0.55	10.00
2019-12-31	0.59	0.65	0.52	11.00

SEHK:3 Past Financials Data
Date (Data in HKD Millions)	EPS *
2018-12-31	0.61
2018-09-30	0.58
2018-06-30	0.56
2018-03-31	0.54
2017-12-31	0.53
2017-09-30	0.51
2017-06-30	0.49
2017-03-31	0.48
2016-12-31	0.48
2016-09-30	0.48
2016-06-30	0.48
2016-03-31	0.48

*GAAP earnings excluding extraordinary items.

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.

Hong Kong and China Gas is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).

Future performance checks

We assess Hong Kong and China Gas's future performance by looking at:

Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Hong Kong market? (1 check)
Is the annual earnings growth rate expected to be above 20%? (1 check)
Is the annual revenue growth rate expected to be above 20%? (1 check)
Is the Return on Equity in 3 years expected to be over 20%? (1 check)

Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Hong Kong and China Gas has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

3 Past Performance

How has Hong Kong and China Gas performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare Hong Kong and China Gas's growth in the last year to its industry (Gas Utilities).

Past Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.

Hong Kong and China Gas's year on year earnings growth rate has been positive over the past 5 years.
Hong Kong and China Gas's 1-year earnings growth exceeds its 5-year average (13.2% vs 4.8%)
Hong Kong and China Gas's earnings growth has exceeded the HK Gas Utilities industry average in the past year (13.2% vs 10.7%).

Earnings and Revenue History

Hong Kong and China Gas's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Raw Data

All data from Hong Kong and China Gas Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:3 Past Revenue, Cash Flow and Net Income Data
Date (Data in HKD Millions)	Revenue	Net Income *	G+A Expenses
2018-12-31	39,073.00	9,312.80	3,295.10
2018-09-30	37,680.10	8,927.75	3,252.05
2018-06-30	36,287.20	8,542.70	3,209.00
2018-03-31	34,381.85	8,384.00	3,121.95
2017-12-31	32,476.50	8,225.30	3,034.90
2017-09-30	31,151.05	7,853.65	3,012.95
2017-06-30	29,825.60	7,482.00	2,991.00
2017-03-31	29,191.35	7,411.35	2,973.10
2016-12-31	28,557.10	7,340.70	2,955.20
2016-09-30	28,613.85	7,360.55	2,924.40
2016-06-30	28,670.60	7,380.40	2,893.60
2016-03-31	29,130.95	7,341.20	2,868.95
2015-12-31	29,591.30	7,302.00	2,844.30
2015-09-30	30,240.55	7,495.90	2,854.55
2015-06-30	30,889.80	7,689.80	2,864.80
2015-03-31	31,252.25	7,450.60	2,785.50
2014-12-31	31,614.70	7,211.40	2,706.20
2014-09-30	31,260.75	7,109.55	2,567.55
2014-06-30	30,906.80	7,007.70	2,428.90
2014-03-31	29,576.35	6,930.75	2,355.30
2013-12-31	28,245.90	6,853.80	2,281.70
2013-09-30	26,890.50	7,032.80	2,202.05
2013-06-30	25,535.10	7,211.80	2,122.40
2013-03-31	25,228.80	7,461.95	2,067.80
2012-12-31	24,922.50	7,712.10	2,013.20
2012-09-30	24,706.85	7,387.45	1,920.30
2012-06-30	24,491.20	7,047.00	1,843.20

*GAAP earnings excluding extraordinary items.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.

Hong Kong and China Gas has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
Hong Kong and China Gas used its assets more efficiently than the HK Gas Utilities industry average last year based on Return on Assets.
Hong Kong and China Gas has improved its use of capital last year versus 3 years ago (Return on Capital Employed).

Show me more strong past performing companies in the Gas Utilities industry

Past performance checks

We assess Hong Kong and China Gas's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the Gas Utilities industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Hong Kong and China Gas has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

3 Health

How is Hong Kong and China Gas's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Hong Kong and China Gas's finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

Hong Kong and China Gas's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Hong Kong and China Gas's long term commitments exceed its cash and other short term assets.

Balance sheet

This treemap shows a more detailed breakdown of Hong Kong and China Gas's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.

Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.

High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.5x debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.

Raw Data

All data from Hong Kong and China Gas Company Filings, last reported 4 months ago.

SEHK:3 Past Debt and Equity Data
Date (Data in HKD Millions)	Total Equity	Total Debt	Cash & Short Term Investments
2018-12-31	70,193.30	39,828.60	9,181.10
2018-09-30	70,193.30	39,828.60	9,181.10
2018-06-30	71,603.10	40,647.40	13,370.10
2018-03-31	71,603.10	40,647.40	13,370.10
2017-12-31	70,245.90	38,744.00	12,991.30
2017-09-30	70,245.90	38,744.00	12,991.30
2017-06-30	65,771.00	35,296.70	10,629.40
2017-03-31	65,771.00	35,296.70	10,629.40
2016-12-31	62,898.00	34,691.30	11,612.00
2016-09-30	62,898.00	34,691.30	11,612.00
2016-06-30	62,966.50	34,734.90	12,616.00
2016-03-31	62,966.50	34,734.90	12,616.00
2015-12-31	62,112.90	34,544.80	13,264.90
2015-09-30	62,112.90	34,544.80	13,264.90
2015-06-30	63,616.10	34,357.30	14,190.90
2015-03-31	63,616.10	34,357.30	14,190.90
2014-12-31	62,223.70	32,952.80	13,863.20
2014-09-30	62,223.70	32,952.80	13,863.20
2014-06-30	59,896.30	32,343.30	13,327.50
2014-03-31	59,896.30	32,343.30	13,327.50
2013-12-31	56,370.50	31,811.20	10,799.60
2013-09-30	56,370.50	31,811.20	10,799.60
2013-06-30	53,624.70	32,094.10	12,347.00
2013-03-31	53,624.70	32,094.10	12,347.00
2012-12-31	50,350.20	32,667.70	12,794.80
2012-09-30	50,466.90	32,276.90	12,794.80
2012-06-30	47,190.10	29,362.00	10,867.10

Hong Kong and China Gas's level of debt (56.7%) compared to net worth is high (greater than 40%).
The level of debt compared to net worth has increased over the past 5 years (56.4% vs 56.7% today).
Debt is well covered by operating cash flow (23.7%, greater than 20% of total debt).
Interest payments on debt are well covered by earnings (EBIT is 11.2x coverage).

Financial health checks

We assess Hong Kong and China Gas's financial health by checking for:

Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by operating cash flow? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)

For companies that are loss making and have been so on average in the past we replace the last 2 checks with:

Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)

Full details on the Health part of the Simply Wall St company analysis model.

3 Dividends

What is Hong Kong and China Gas's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.

Annual Dividend Income

1.77%

Current annual income from Hong Kong and China Gas dividends. Estimated to be 2% next year.

If you bought HK$2,000 of Hong Kong and China Gas shares you are expected to receive HK$35 in your first year as a dividend.

Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?

Hong Kong and China Gas's pays a lower dividend yield than the bottom 25% of dividend payers in Hong Kong (2.1%).
Hong Kong and China Gas's dividend is below the markets top 25% of dividend payers in Hong Kong (5.83%).

Upcoming dividend payment

Purchase Hong Kong and China Gas before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.

Annualized Historical and Future Dividends

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.

Raw Data

SEHK:3 Annualized Past and Future Dividends
Data Point	Source	Value
Past Annualized Dividend Yield	S&P Global Market Data	See Below
Past Dividends per Share	Company Filings/ Annualized Dividend Payments	See Below
Future Dividends per Share Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below
Hong Kong Gas Utilities Industry Average Dividend Yield	Market Cap Weighted Average of 11 Stocks	1.8%
Hong Kong Market Average Dividend Yield	Market Cap Weighted Average of 965 Stocks	3.7%
Hong Kong Minimum Threshold Dividend Yield	10th Percentile	1.2%
Hong Kong Bottom 25% Dividend Yield	25th Percentile	2.1%
Hong Kong Top 25% Dividend Yield	75th Percentile	5.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:3 Future Dividends Estimate Data
Date (Data in HK$)	Dividend per Share (annual)	Avg. No. Analysts
2021-12-31	0.43	5.00
2020-12-31	0.40	10.00
2019-12-31	0.38	10.00

SEHK:3 Past Annualized Dividends Data
Date (Data in HK$)	Dividend per share (annual)	Avg. Yield (%)
2019-03-20	0.350	1.858
2018-08-21	0.350	2.168
2018-04-23	0.318	2.063
2018-03-20	0.318	2.161
2017-04-19	0.289	2.135
2017-03-16	0.289	2.257
2016-04-21	0.263	2.229
2016-03-18	0.263	2.426
2015-04-22	0.239	2.088
2015-03-18	0.239	1.927
2014-08-25	0.217	1.796
2014-04-23	0.217	1.888
2014-03-19	0.217	2.043
2013-04-22	0.198	1.735
2013-03-18	0.198	1.548
2012-03-19	0.180	1.669
2011-08-23	0.169	1.816
2011-03-15	0.163	1.816
2010-09-07	0.154	1.772
2010-03-16	0.148	1.729
2009-08-27	0.148	1.891

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Dividends per share have been stable in the past 10 years.
Dividends per share have increased over the past 10 years.

Current Payout to shareholders

What portion of Hong Kong and China Gas's earnings are paid to the shareholders as a dividend.

Dividends paid are covered by earnings (1.7x coverage).

Future Payout to shareholders

Dividends after 3 years are expected to be covered by earnings (1.5x coverage).

Show me more dividend paying companies in the Gas Utilities industry

Income/ dividend checks

We assess Hong Kong and China Gas's dividend by checking for:

Firstly is the company paying a notable dividend (greater than 1.2%) - if not then the rest of the checks are ignored.
Is current dividend yield above the bottom 25% of dividend payers? (1 check)
Is current dividend yield above the top 25% of dividend payers? (1 check)
Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
If they have paid a dividend for 10 years has it increased in this time? (1 check)
How sustainable is the dividend, can Hong Kong and China Gas afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)

Full details on the Dividends part of the Simply Wall St company analysis model.

3 Management

What is the CEO of Hong Kong and China Gas's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Alfred Chan

COMPENSATION	HK$37,800,000
AGE	67
TENURE AS CEO	22 years

CEO Bio

Mr. Wing Kin Chan, also known as Alfred, B.B.S., C.Eng., F.H.K.I.E., F.I. Mech.E., F.I.G.E.M., F.E.I., M.Sc. (Eng), B.Sc. (Eng), has been the Managing Director of The Hong Kong And China Gas Company Limited since May 1997 and also has been its Executive Director since January 1997. Mr. Chan has been the Chairman and Executive Director of Towngas China Company Limited since March 1, 2007. He has been an Executive Director of Henderson Cyber Limited since January 2000 and the subsidiary companies of the Group. He served as General Manager of Marketing at The Hong Kong and China Gas Company Limited from 1992 to 1995 and General Manager of Marketing & Customer Service since 1995.He serves as the Chairman of the Group's joint venture companies in China: Panyu Hong Kong & China Gas Limited, Zhongshan Hong Kong & China Gas Limited, Guangzhou Dongyong Hong Kong & China Gas Limited, Qingdao Zhongji Hong Kong and China Gas Company Limited and Yixing Hong Kong & China Gas Company Limited. He has been Vice Chairman of Shenzhen Gas Corporation Ltd. since April 2004. He has been a Non-Executive Director of Shanghai DaZhong Public Utilities (Group) Co. Ltd. since May 25, 2017. He serves as a Director of Suzhou Industrial Park Hong Kong and China Gas Company Limited. He served as an Independent Non-Executive Director of Standard Chartered Bank (Hong Kong) Limited until July 17, 2015. He is a Standing Director of the China Gas Association. He received the Executive Award under the DHL/SCMP Hong Kong Business Awards 2005 and the Director of the Year Awards - Listed Companies (SEHK - Hang Seng Index Constituents) Executive Directors from The Hong Kong Institute of Directors in 2006, the Leadership Award in Gas Industry Award 2015 from the Institution of Gas Engineers & Managers and the Energy and Utilities Alliance of the United Kingdom, “The CEO of the Year 2017” Award from China Newsweek in 2017 and was named consecutively as one of “The 100 Best-Performing CEOs in the World” by Harvard Business Review from 2015 to 2017. He was awarded an Honorary Fellowship by The Hong Kong Institute of Education (now known as The Education University of Hong Kong) in 2016.Mr. Chan is a Chartered Engineer and Fellow of The Institution of Mechanical Engineers, Fellow of The Hong Kong Institution of Engineers, Fellow of The Institution of Gas Engineers & Managers, Fellow of The Energy Institute and Honorary Fellow of International Institute of Utility Specialists. He is also the Chairman and President of Hong Kong & China Gas Investment Limited, an investment holding company in mainland China and Chairman, Vice Chairman or a director of a number of the project companies in mainland China. He is an Honorary President of The Hong Kong Management Association and a Vice Chairman of China Gas Association. Mr. Chan is a Member of the Standing Committee on Judicial Salaries and Conditions of Service of the Government of the Hong Kong Special Administrative Region. He holds a B.Sc. (Eng) degree and a M.Sc. (Eng) degree from the University of Hong Kong.

CEO Compensation

Alfred's compensation has been consistent with company performance over the past year, both up more than 20%.
Alfred's remuneration is higher than average for companies of similar size in Hong Kong.

Management Team

Alfred Chan

TITLE

MD & Executive Director

22.3

Average Tenure

Average Age

The average tenure for the Hong Kong and China Gas board of directors is over 10 years, this suggests they are a seasoned and experienced board.

Recent Insider Trading

No 3 month insider trading information.

Recent Insider Transactions

Announced	Type	Name	Entity	Start	End	Shares	Max Price (HK$)	Value (HK$)
31. Aug 18	Buy	Kwok-Po Li	Individual	28. Aug 18	28. Aug 18	680,000	HK$15.96	HK$10,851,034
31. Aug 18	Buy	Kwok-Po Li	Individual	29. Aug 18	29. Aug 18	1,000,000	HK$15.94	HK$15,938,198
31. Aug 18	Buy	Kwok-Po Li	Individual	30. Aug 18	30. Aug 18	600,000	HK$15.98	HK$9,586,978
28. Aug 18	Buy	Kwok-Po Li	Individual	27. Aug 18	27. Aug 18	200,000	HK$15.93	HK$3,185,599
28. Aug 18	Buy	Kwok-Po Li	Individual	23. Aug 18	23. Aug 18	40,000	HK$15.76	HK$630,400
28. Aug 18	Buy	Kwok-Po Li	Individual	24. Aug 18	24. Aug 18	80,000	HK$15.65	HK$1,252,400

Management checks

We assess Hong Kong and China Gas's management by checking for:

Is the CEO's compensation unreasonable compared to market cap? (1 check)
Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
Is the average tenure of the management team less than 2 years? (1 check)
Is the average tenure of the board of directors team less than 3 years? (1 check)

Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

3 News

Simply Wall St News

The Hong Kong and China Gas Company Limited's (HKG:3) Earnings Grew 13%, Did It Beat Long-Term Trend?

Measuring The Hong Kong and China Gas Company Limited's (HKG:3) track record of past performance is a valuable exercise for investors. … View our latest analysis for Hong Kong and China Gas Did 3 beat its long-term earnings growth trend and its industry? … I suggest you continue to research Hong Kong and China Gas to get a more holistic view of the stock by looking at: Future Outlook: What are well-informed industry analysts predicting for 3’s future growth?

Simply Wall St - 6 days ago – Full article

Did The Hong Kong and China Gas Company Limited (HKG:3) Insiders Buy Up More Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in The Hong Kong and China Gas Company Limited (HKG:3). … Insider Ownership of Hong Kong and China Gas Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. … Judging from their transactions, and high insider ownership, Hong Kong and China Gas insiders feel good about the company's future.

Simply Wall St - 2 weeks ago – Full article

The Hong Kong and China Gas Company Limited (HKG:3): What Can We Expect In The Future?

Help shape the future of investing tools and you could win a $250 gift card! … Based on The Hong Kong and China Gas Company Limited's (HKG:3) recently announced earnings update on 31 December 2018,

Simply Wall St - 3 weeks ago – Full article

Can The Hong Kong and China Gas Company Limited's (HKG:3) ROE Continue To Surpass The Industry Average?

We'll use ROE to examine The Hong Kong and China Gas Company Limited (HKG:3), by way of a worked example. … Hong Kong and China Gas has a ROE of 15%, based on the last twelve months. … One way to conceptualize this, is that for each HK$1 of shareholders' equity it has, the company made HK$0.15 in profit.

Simply Wall St - 1 month ago – Full article

Why The Hong Kong and China Gas Company Limited (HKG:3) Could Have A Place In Your Portfolio

I've been keeping an eye on The Hong Kong and China Gas Company Limited (HKG:3) because I'm attracted to its fundamentals. … Looking at the company as a whole, as a potential stock investment, I believe 3 has a lot to offer.

Simply Wall St - 1 month ago – Full article

Do The Hong Kong and China Gas Company Limited’s (HKG:3) Returns On Capital Employed Make The Cut?

Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business. … Return On Capital Employed (ROCE): What is it? … ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business.

Simply Wall St - 1 month ago – Full article

Have Insiders Been Buying The Hong Kong and China Gas Company Limited (HKG:3) Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in The Hong Kong and China Gas Company Limited (HKG:3). … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … In any event it's generally a positive if insiders are buying shares at around the current price

Simply Wall St - 1 month ago – Full article

The Hong Kong and China Gas Company Limited (HKG:3): What Are The Future Prospects?

In December 2018, The Hong Kong and China Gas Company Limited (HKG:3) released its most recent earnings announcement, whicha … company

Simply Wall St - 2 months ago – Full article

What Investors Should Know About The Hong Kong and China Gas Company Limited's (HKG:3) Financial Strength

There are a number of reasons that attract investors towards large-cap companies such as The Hong Kong and China Gas Company Limited (HKG:3), with a market cap of HK$279b. … I will provide an overview of Hong Kong and China Gas’s financial liquidity and leverage to give you an idea of Hong Kong and China Gas’s position to take advantage of potential acquisitions or comfortably endure future downturns. … Check out our latest analysis for Hong Kong and China Gas

Simply Wall St - 2 months ago – Full article

If You Had Bought Hong Kong and China Gas Stock Five Years Ago, You Could Pocket A 75% Gain Today

For example, the The Hong Kong and China Gas Company Limited (HKG:3) share price is up 75% in the last 5 years, clearly besting than the market return of around 18% (ignoring dividends). … During five years of share price growth, Hong Kong and China Gas achieved compound earnings per share (EPS) growth of 3.5% per year. … This EPS growth is slower than the share price growth of 12% per year, over the same period.

Simply Wall St - 2 months ago – Full article

3 Company Info

Description

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas in Hong Kong and Mainland China. It is involved in the provision of liquefied natural gas, methanol, and coal and other chemicals; conversion and utilization of biomass, and industrial and agricultural waste; and operation of natural gas refilling stations, piped city-gas projects, upstream and midstream developments, water and wastewater treatment projects, energy exploration and utilization ventures, and Aviation fuel facilities. The company operates a pipeline network of 3,600 km gas pipes severing approximately 1.9 million customers. It also provides network connectivity, and data center and cloud computing services; and engages in the software development, solution implementation, and systems integration activities. In addition, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Further, it is involved in water production and distribution, wastewater treatment, industrial wastewater treatment, water reuse, network construction, and purified water businesses serving 1.2 million customers through a pipeline network of approximately 7,000 km. Additionally, the company manufactures polyethylene piping and fittings; and engages in the customers center, café, restaurant, retail sale, automatic meter reading system development, laboratory testing, payment gateway and related, project management, landfill gas project, financing, logistics, oil, research and development, property development, and securities investment activities. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.

Details

Name:	The Hong Kong and China Gas Company Limited
Ticker:	3
Exchange:	SEHK
Founded:	1862
Market Cap:	HK$304,343,212,171
Shares outstanding:	15,386,411,131
Website:	http://www.towngas.com
Address:	The Hong Kong and China Gas Company Limited 363 Java Road, 23rd Floor, North Point, Hong Kong

Listings

Exchange Symbol	Ticker Symbol	Security	Exchange	Country	Currency	Listed on
SEHK	3	Ordinary Shares	The Stock Exchange of Hong Kong Ltd.	HK	HKD	02. Jan 1992
OTCPK	HOKC.F	Ordinary Shares	Pink Sheets LLC	US	USD	02. Jan 1992
DB	HCG	Ordinary Shares	Deutsche Boerse AG	DE	EUR	02. Jan 1992
SHSC	3	Ordinary Shares	Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect	HK	HKD	02. Jan 1992
SZSC	3	Ordinary Shares	The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect	HK	HKD	02. Jan 1992
OTCPK	HOKC.Y	SPONSORED ADR	Pink Sheets LLC	US	USD	28. Mar 1991

Number of employees

Current staff

52,118

Hong Kong and China Gas employees.

Industry

Industry:	Gas Utilities
Sector:	Utilities

Company Analysis and Financial Data Status

Area	Date (UTC time)
Company Analysis updated:	2019/05/26 12:37
End of day share price update:	2019/05/24 00:00
Last estimates confirmation:	2019/05/22
Last earnings filing:	2019/04/18
Last earnings reported:	2018/12/31
Last annual earnings reported:	2018/12/31

All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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