SEHK:3

Stock Analysis Report

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

Fundamentals

Average 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


Market Performance


7 Day Return

-0.4%

3

2.0%

HK Gas Utilities

0.3%

HK Market


1 Year Return

13.0%

3

17.0%

HK Gas Utilities

1.3%

HK Market

Return vs Industry: 3 underperformed the Hong Kong Gas Utilities industry which returned 17% over the past year.

Return vs Market: 3 exceeded the Hong Kong Market which returned 1.3% over the past year.


Shareholder returns

3IndustryMarket
7 Day-0.4%2.0%0.3%
30 Day-1.6%3.7%0.5%
90 Day-13.2%-2.5%-4.6%
1 Year15.1%13.0%19.5%17.0%4.9%1.3%
3 Year43.3%35.1%66.2%56.7%15.3%3.7%
5 Year50.8%36.5%45.2%31.8%20.0%-0.006%

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?

30.62x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 3 (HK$15.22) is trading above our estimate of fair value (HK$7.18)

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 (30.6x) compared to the Gas Utilities industry average (19.9x).

PE vs Market: 3 is poor value based on its PE Ratio (30.6x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 3 is poor value based on its PEG Ratio (5.2x)


Price to Book Ratio

PB vs Industry: 3 is overvalued based on its PB Ratio (4x) compared to the HK Gas Utilities industry average (1.2x).


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 12 analysts?

5.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3's forecast earnings growth (5.9% per year) is above the savings rate (2%).

Earnings vs Market: 3's earnings (5.9% per year) are forecast to grow slower than the Hong Kong market (11.1% per year).

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

Revenue vs Market: 3's revenue (8.4% per year) is forecast to grow slower than the Hong Kong market (10% per year).

High Growth Revenue: 3's revenue (8.4% 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 (13.2%).


Next Steps

Past Performance

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

4.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 3's earnings have grown by 4.8% 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 (-1.5%) over the past year, making it difficult to compare to the Gas Utilities industry average (-4.6%).


Return on Equity

High ROE: 3's Return on Equity (13%) is considered low.


Return on Assets

ROA vs Industry: 3 has a higher Return on Assets than the Gas Utilities industry average last year.


Return on Capital Employed

ROCE Improving: 3 has not improved its Return on Capital Employed over the past 3 years.


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$19.7B) do not cover its short term liabilities (HK$24.8B)

Long Term Liabilities: 3's short term assets (19.7B) do not cover its long term liabilities (37.2B)


Debt to Equity History and Analysis

Debt Level: 3's debt to equity ratio (52.9%) is considered high

Reducing Debt: 3's debt to equity ratio has reduced from 54% to 52.9% over the past 5 years.

Debt Coverage: 3's debt is well covered by operating cash flow (24%).

Interest Coverage: 3's interest payments on its debt are well covered by EBIT (11.5x coverage).


Balance Sheet

Inventory Level: 3 has a high level of physical assets or inventory.

Debt Coverage by Assets: 3's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

2.16%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%2.3%markettop25%6.2%industryaverage1.9%forecastin3Years2.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 3's dividend (2.16%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 3's dividend (2.16%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.18%).

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: With its reasonable payout ratio (66.2%), 3's dividend 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 (73.6% payout ratio).


Next Steps

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?

8.3yrs

Average board tenure


CEO

Alfred Chan (68yo)

22.4yrs

Tenure

HK$37,800,000

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 ($USD4.82M) is about average for companies of similar size in the Hong Kong market ($USD807.54K).

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


Board Age and Tenure

8.3yrs

Average Tenure

68yo

Average Age

Experienced Board: 3's board of directors are considered experienced (8.3 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Alfred Chan (68yo)

    MD & Executive Director

    • Tenure: 22.4yrs
    • Compensation: HK$37.80m
  • Peter Wong (68yo)

    COO of Utilities Business & Executive Director

    • Tenure: 6.7yrs
    • Compensation: HK$16.30m
  • John Ho (63yo)

    CFO & Company Secretary

    • Tenure: 0yrs
  • Philip Siu

    Chief Operating Officer of New Energy Business

    • Tenure: 0yrs
  • Peter Wong

    Head of Commercial - Hong Kong Utilities

    • Tenure: 0yrs
  • Kit Fan

    Head of Corporate Human Resources

    • Tenure: 0yrs
  • Simon Hing

    Head of Engineering - Hong Kong Utilities

    • Tenure: 0yrs

Board Members

  • Moses Cheng (69yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
  • Alfred Chan (68yo)

    MD & Executive Director

    • Tenure: 22.4yrs
    • Compensation: HK$37.80m
  • Peter Lee (56yo)

    Joint Chairmen

    • Tenure: 0.4yrs
    • Compensation: HK$300.00k
  • Martin Lee (47yo)

    Joint Chairmen

    • Tenure: 0.4yrs
    • Compensation: HK$300.00k
  • Colin Lam (67yo)

    Non-Executive Director

    • Tenure: 36.3yrs
    • Compensation: HK$400.00k
  • David Li (80yo)

    Independent Non-Executive Director

    • Tenure: 35.8yrs
    • Compensation: HK$700.00k
  • Chung Kwong Poon (79yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: HK$700.00k
  • Peter Wong (68yo)

    COO of Utilities Business & Executive Director

    • Tenure: 6.7yrs
    • Compensation: HK$16.30m

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$258.953b
  • Shares outstanding: 16.93b
  • 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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:37
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.