The 2017 annual results of the Company were generally in line withmarket consensus and our expectations. Total revenue of the Companyincreased 13.72% yoy to HK$ 32.48 billion; net profit attributable toshareholders increased 12.05% yoy to HK$ 8.23 billion.
We expect total sale of gas and cooking sets in Hong Kong to remainstable in 2018. Hong Kong’s gas distribution market is a highly mature andstable market, making it have a stable customer group with stable gasconsumption.
We expect total sales of natural gas of the Company to increase by10%-15% in 2018. We expect natural gas consumed by residentialcustomers to maintain at the growth rate of about 10% in 2018, but naturalgas consumed by industrial customers is expected to grow at a faster speed.
We expect gas dollar margin of the Company to remain stable in 2018.
We believe that gas procurement costs will be more stable in 2018 andcustomer mix change will only have limited impact.
Revise up the TP to HK$ 19.05 and maintain “Buy”。