The company's 2018 interim results fell short of our expectations. The company's revenue increased 39% year over year to HK$1.62 billion, but shareholders' net profit plummeted 60% to HK$71.6 million. The main reason for the significant decline in shareholders' net profit was exchange gains and losses and higher financial expenses.

Keep the gas sales assumption unchanged. The company expects natural gas sales to increase by about 30% to 890 million cubic meters in 2018, and the gas transmission business is also expected to grow significantly to more than 500 million cubic meters. The company's gas sales for the first half of 2018 were in line with our expectations, and the company kept its gas sales target unchanged.

The assumption is that the spread of gas sales remains unchanged. We expect the company's gas price spread to improve in the second half of 2018. We expect gas procurement costs to be more stable in the second half of 2018 compared to the same period last year, and the company's gas price spread will return to a normal level.

Keep the connection revenue assumption unchanged. The company expects the number of new connected customers to increase by around 15% in 2018.

Maintain the company's target price at HK$2.52 and maintain the “buy” rating.