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Investing.com - Citi has downgraded China Resources Gas Group Ltd. (HK:1193) (OTC:CRGGF) from Buy to Sell, while significantly reducing its price target to HK$18.00 from HK$25.00, representing a 28% decrease.
The downgrade follows Citi’s reduction of its 2025-2027 net profit estimates for the company by 18-20%, citing "weaker-than-expected business performance due to more reviews and checks affecting business development." Citi’s revised profit forecasts now sit 17-20% below consensus estimates.
Citi projects China Resources Gas will report a substantial 42% year-over-year decline in net profit to HK$2,000 million for the first half of 2025, attributing this to increased expenses being recorded under a new auditor.
The firm notes that China Resources Gas’s projected 2025 dividend yield of 4.4% appears relatively unattractive compared to industry peers, with ENN Energy offering 4.8%, Towngas Smart Energy at 4.7%, and Beijing Enterprises providing 5.5%.
Citi has also placed China Resources Gas on a 90-day negative catalyst watch, anticipating the company will miss profit expectations for the first half of 2025.
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