"Big Banks" JP Morgan: The delay in ENN Energy's privatization plan is within expectations, recommend paying attention to KUNLUN ENERGY

ENN Energy (02688.HK) recently announced that due to the need for additional time to meet the remaining conditions precedent, the final date for sending out the privatization plan documents has been further extended from December 1 to no later than January 30 next year. JP Morgan issued a research report stating that the delay in the privatization plan is not entirely unexpected for the market, as management did not disclose the latest progress on the privatization during the last third-quarter earnings call. It is currently believed that ENN Energy's H shares offer better risk-return compared to A shares, and the delay in the privatization plan is expected to have a slight negative impact on the stock price.

JP Morgan also pointed out that China Gas (00384.HK) reported disappointing performance for the first half of the fiscal year ending September this year, with all operational indicators showing weakness. However, it is currently expected that gas sales in China will gradually recover in the next two to three months due to a low base for winter gas usage. Under a better mechanism for passing on residential gas costs, it is believed that most gas stocks can achieve stable profit margins year-on-year.

At the current valuation level, the recommendation for investors is to pay attention to the market entry opportunities for KUNLUN ENERGY (00135.HK), indicating that improvements in gas sales have already been observed quarter by quarter for companies such as China Resources Gas (01193.HK) and KUNLUN ENERGY. It is expected that KUNLUN ENERGY's sales growth in the second half of this year could exceed 5%