The company's 2017 annual results were generally in line with market consensus expectations and our estimates. The company's revenue increased 13.72% year over year to HK$32.48 billion, and shareholders' net profit increased 12.05% year over year to HK$8.23 billion.

We expect gas and stove sales in Hong Kong to remain stable in 2018. The Hong Kong gas market is a highly mature and stable market, making its consumer groups and natural gas consumption very stable.

We expect the company's gas sales to grow 10%-15% in 2018. We expect the gas consumption of residential users to maintain a growth level of around 10% in 2018, but the gas consumption of industrial users is expected to grow even faster.

We expect the company's gas price spread to remain stable in 2018. We believe gas purchase prices will be more stable in 2018, and the impact of changes in customer structure will be limited.

The target price was raised to HK$19.05 to maintain the “buy” rating.