3

Hong Kong and China GasSEHK:3 Stock Report

Market Cap

HK$229.5b

7D

-1.8%

1Y

13.7%

Updated

19 Sep, 2021

Data

Company Financials +
3 fundamental analysis
Snowflake Score
Valuation0/6
Future Growth1/6
Past Performance3/6
Financial Health2/6
Dividends5/6

3 Overview

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas in Hong Kong and Mainland China.

Hong Kong and China Gas Competitors

Power Assets Holdings

SEHK:6

HK$98.7b

HK Electric Investments and HK Electric Investments

SEHK:2638

HK$66.3b

Price History & Performance

Summary of all time highs, changes and price drops for Hong Kong and China Gas
Historical stock prices
Current Share PriceHK$12.30
52 Week HighHK$10.36
52 Week LowHK$13.40
Beta0.48
1 Month Change-4.65%
3 Month Change4.77%
1 Year Change13.69%
3 Year Change-4.26%
5 Year Change21.46%
Change since IPO1,695.36%

Recent News & Updates

Sep 15
Hong Kong and China Gas (HKG:3) Seems To Use Debt Quite Sensibly

Hong Kong and China Gas (HKG:3) Seems To Use Debt Quite Sensibly

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Aug 22
Hong Kong and China Gas (HKG:3) Has Re-Affirmed Its Dividend Of HK$0.12

Hong Kong and China Gas (HKG:3) Has Re-Affirmed Its Dividend Of HK$0.12

The board of The Hong Kong and China Gas Company Limited ( HKG:3 ) has announced that it will pay a dividend on the...

May 27
Returns On Capital At Hong Kong and China Gas (HKG:3) Have Stalled

Returns On Capital At Hong Kong and China Gas (HKG:3) Have Stalled

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'll want to see a proven...

Shareholder Returns

3HK Gas UtilitiesHK Market
7D-1.8%-2.0%-4.6%
1Y13.7%25.8%5.2%

Return vs Industry: 3 underperformed the Hong Kong Gas Utilities industry which returned 25.8% over the past year.

Return vs Market: 3 exceeded the Hong Kong Market which returned 5.2% over the past year.

Price Volatility

Is 3's price volatile compared to industry and market?
3 volatility
3 Beta0.48
Industry Beta0.52
Market Beta1

Stable Share Price: 3 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 3's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
186254,031Alfred Chanhttps://www.towngas.com

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 supplies town gas to approximately 1.9 million customers.

Valuation

Is Hong Kong and China Gas undervalued compared to its fair value and its price relative to the market?

30.44x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 3 (HK$12.3) is trading above our estimate of fair value (HK$7.52)

Significantly Below Fair Value: 3 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 3 is poor value based on its PE Ratio (30.4x) compared to the Hong Kong Gas Utilities industry average (11.9x).

PE vs Market: 3 is poor value based on its PE Ratio (30.4x) compared to the Hong Kong market (10x).


Price to Earnings Growth Ratio

PEG Ratio: 3 is poor value based on its PEG Ratio (3.8x)


Price to Book Ratio

PB vs Industry: 3 is overvalued based on its PB Ratio (3.3x) compared to the HK Gas Utilities industry average (1.2x).


Future Growth

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

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3's forecast earnings growth (8.1% per year) is above the savings rate (1.5%).

Earnings vs Market: 3's earnings (8.1% per year) are forecast to grow slower than the Hong Kong market (17.1% per year).

High Growth Earnings: 3's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3's revenue (8.3% per year) is forecast to grow slower than the Hong Kong market (12.3% per year).

High Growth Revenue: 3's revenue (8.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3's Return on Equity is forecast to be low in 3 years time (12.8%).


Past Performance

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

-3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3 has high quality earnings.

Growing Profit Margin: 3's current net profit margins (15.9%) are higher than last year (14.9%).


Past Earnings Growth Analysis

Earnings Trend: 3's earnings have declined by 3.5% per year over the past 5 years.

Accelerating Growth: 3's earnings growth over the past year (31.3%) exceeds its 5-year average (-3.5% per year).

Earnings vs Industry: 3 earnings growth over the past year (31.3%) underperformed the Gas Utilities industry 43.6%.


Return on Equity

High ROE: 3's Return on Equity (11.1%) is considered low.


Financial Health

How is Hong Kong and China Gas's financial position?


Financial Position Analysis

Short Term Liabilities: 3's short term assets (HK$20.4B) do not cover its short term liabilities (HK$36.8B).

Long Term Liabilities: 3's short term assets (HK$20.4B) do not cover its long term liabilities (HK$43.4B).


Debt to Equity History and Analysis

Debt Level: 3's debt to equity ratio (65%) is considered high.

Reducing Debt: 3's debt to equity ratio has increased from 55.2% to 65% over the past 5 years.

Debt Coverage: 3's debt is well covered by operating cash flow (20.9%).

Interest Coverage: 3's interest payments on its debt are well covered by EBIT (9.4x coverage).


Balance Sheet


Dividend

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

2.85%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 3's dividend (2.85%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 3's dividend (2.85%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.76%).


Stability and Growth of Payments

Stable Dividend: 3's dividends per share have been stable in the past 10 years.

Growing Dividend: 3's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (83.9%), 3's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3's dividends in 3 years are forecast to be covered by earnings (77% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.6yrs

Average board tenure


CEO

Alfred Chan (70 yo)

24.33yrs

Tenure

HK$34,600,000

Compensation

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 Limite...


CEO Compensation Analysis

Compensation vs Market: Alfred's total compensation ($USD4.45M) is above average for companies of similar size in the Hong Kong market ($USD1.04M).

Compensation vs Earnings: Alfred's compensation has been consistent with company performance over the past year.


Board Members

Experienced Board: 3's board of directors are considered experienced (8.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Hong Kong and China Gas Company Limited's employee growth, exchange listings and data sources


Key Information

  • Name: The Hong Kong and China Gas Company Limited
  • Ticker: 3
  • Exchange: SEHK
  • Founded: 1862
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: HK$229.516b
  • Shares outstanding: 18.66b
  • Website: https://www.towngas.com

Number of Employees


Location

  • The Hong Kong and China Gas Company Limited
  • 363 Java Road
  • 23rd Floor
  • North Point
  • Hong Kong

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/19 10:02
End of Day Share Price2021/09/17 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.