SEHK:3

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Hong Kong and China Gas

Executive Summary

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


Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Hong Kong and China Gas's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

3

2.3%

HK Gas Utilities

6.6%

HK Market


1 Year Return

-30.4%

3

-18.7%

HK Gas Utilities

0.6%

HK Market

Return vs Industry: 3 underperformed the Hong Kong Gas Utilities industry which returned -18.7% over the past year.

Return vs Market: 3 underperformed the Hong Kong Market which returned 0.6% over the past year.


Shareholder returns

3IndustryMarket
7 Day-2.6%2.3%6.6%
30 Day-7.2%-4.9%8.1%
90 Day-12.2%-0.9%13.9%
1 Year-28.7%-30.4%-16.7%-18.7%4.7%0.6%
3 Year7.0%0.4%18.6%11.0%9.7%-2.2%
5 Year27.1%14.3%38.7%24.7%12.5%-6.4%

Price Volatility Vs. Market

How volatile is Hong Kong and China Gas's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

30.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 3 (HK$11.78) is trading above our estimate of fair value (HK$7.26)

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 (30.1x) compared to the HK Gas Utilities industry average (15.6x).

PE vs Market: 3 is poor value based on its PE Ratio (30.1x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 3 is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: 3 is overvalued based on its PB Ratio (3.1x) compared to the HK Gas Utilities industry average (1.5x).


Next Steps

Future Growth

How is Hong Kong and China Gas forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

7.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3's forecast earnings growth (7.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 3's earnings (7.2% per year) are forecast to grow slower than the Hong Kong market (17.7% per year).

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

Revenue vs Market: 3's revenue (5.9% per year) is forecast to grow slower than the Hong Kong market (10.8% per year).

High Growth Revenue: 3's revenue (5.9% 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 (12.4%).


Next Steps

Past Performance

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

3.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3 has high quality earnings.

Growing Profit Margin: 3's current net profit margins (17.1%) are lower than last year (23.8%).


Past Earnings Growth Analysis

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

Accelerating Growth: 3's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3 had negative earnings growth (-25.2%) over the past year, making it difficult to compare to the Gas Utilities industry average (6.9%).


Return on Equity

High ROE: 3's Return on Equity (10.8%) is considered low.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: 3's short term assets (HK$20.1B) do not cover its short term liabilities (HK$26.2B).

Long Term Liabilities: 3's short term assets (HK$20.1B) do not cover its long term liabilities (HK$38.9B).


Debt to Equity History and Analysis

Debt Level: 3's debt to equity ratio (52.5%) is considered high.

Reducing Debt: 3's debt to equity ratio has reduced from 53% to 52.5% over the past 5 years.

Debt Coverage: 3's debt is well covered by operating cash flow (25%).

Interest Coverage: 3's interest payments on its debt are well covered by EBIT (8.9x coverage).


Balance Sheet


Next Steps

Dividend

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

2.83%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 3's dividend (2.83%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 3's dividend (2.83%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.67%).


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 (85%), 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 (78.9% payout ratio).


Next Steps

Management

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

9.0yrs

Average board tenure


CEO

Alfred Chan (69yo)

23.17yrs

Tenure

HK$33,900,000

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 ($USD4.37M) is above average for companies of similar size in the Hong Kong market ($USD782.77K).

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


Board Members

NamePositionTenureCompensationOwnership
Wing Kin Chan
MD & Executive Director23.17yrsHK$33.90m0.0019% HK$4.0m
Wai Yee Wong
COO of Utilities Business & Executive Director7.42yrsHK$17.20mno data
Mo Chi Cheng
Independent Non-Executive Director1.5yrsHK$700.00kno data
Ka-Kit Lee
Joint Chairman1.17yrsHK$700.00kno data
Ka-Shing Lee
Joint Chairman1.17yrsHK$700.00kno data
Ko Yin Lam
Non-Executive Director37yrsHK$400.00kno data
Kwok-Po Li
Independent Non-Executive Director36.5yrsHK$700.00k0.30% HK$622.4m
Chung Kwong Poon
Independent Non-Executive Director10.67yrsHK$700.00k0.0013% HK$2.7m

9.0yrs

Average Tenure

69yo

Average Age

Experienced Board: 3's board of directors are considered experienced (9 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.


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 company bio, 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$210.412b
  • Shares outstanding: 17.77b
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HOKC.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMar 1991
3SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
HCGDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
HOKC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
3SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
3SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992

Biography

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. 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 supply and wastewater treatment serving 2.4 million customers. 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/10 12:36
End of Day Share Price2020/07/10 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.