The 2018 annual results of the Company were higher than marketconsensus and our expectations. Total revenue of the Company increased20.3% yoy to HK$ 39.07 billion; net profit attributable to shareholdersincreased 13.2% yoy to HK$ 9.31billion.
We expect total sale of gas and cooking sets in Hong Kong to remainstable in 2019. Hong Kong’s gas distribution market is a highly mature andstable market with a stable customer group alongside stable gasconsumption.
We expect total sales of natural gas of the Company to increase by15%-20% in 2019. We expect China’s natural gas consumption to benefitfrom the adjustment of energy consumption structure and environmentalprotection pressure in the long term. We expect natural gas consumed byresidential customers to grow by 10%-12% in 2019; natural gas consumed byindustrial customers is expected to grow at a faster speed.
We expect gas dollar margin of the Company to remain stable in 2019.
We believe that gas procurement costs will still be stable in 2019 andcustomer mix change will only have limited impact.
Revise up the TP to HK$ 22.40 and maintain "Buy".