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<Research>BofAS Downgrades KUNLUN ENERGY to Underperform, Favors PETROCHINA; CN Natural Gas Demand Growth Likely to Slow
Recommend 8 Positive 9 Negative 6 |
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BofA Securities has issued a research report predicting China's natural gas demand growth to slow to 2-3% annually in 2025-27, compared to a CAGR of 9% over the past decade, as coal remaining a more economical fuel due to weak industrial demand, coupled with the highest levelized cost of electricity for gas-fired power generation, has made "coal-to-renewable energy" more attractive. The broker kept a Buy rating on PETROCHINA (00857.HK) because of the relatively stable average selling price of natural gas and the narrowing losses on imported natural gas as oil prices decline. PETROCHINA's target price was raised by 12% to HKD9.5. As for KUNLUN ENERGY (00135.HK), BofA Securities downgraded its rating from Neutral to Underperform, since industrial customers account for 75% of the company's retail natural gas sales. With costs remaining almost unchanged, KUNLUN ENERGY will need to cut prices to maintain customer appeal, such as for glass manufacturers who are more price-sensitive. KUNLUN ENERGY's target price was lowered by 16% to HKD7. AAStocks Financial News |
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