Jinwu Financial News | Gas stocks rise against the market trend, ENN ENERGY (02688) up 3.55%, CHINA RES GAS (01193) up 2.05%, HK & CHINA GAS (00003) up 1.59%, TG SMART ENERGY (01083) up 1.55%, Shanghai Dazhong Public Utilities (01635) up 0.99%, KUNLUN ENERGY (00135) up 0.79%.
A report by HSBC Research indicates that the outcome of the ceasefire agreement between Russia and Ukraine remains highly uncertain. However, the team assumes that if an agreement is reached, oil prices will come under pressure due to increased supply and the normalization of trade, while there remains skepticism about whether Russia will resume gas supplies to Europe. The bank also mentioned that, in addition to the impact on oil and gas prices, since April 2022, the mainland has been importing Russian fuel at discounted prices, a situation that may change under a ceasefire scenario.
The bank believes that the decrease in oil and gas import costs will directly alleviate the operational cost pressures on downstream gas utilities, especially in regions that rely on imported liquefied natural gas. Among its coverage, ENN ENERGY has the highest exposure, with approximately 64% of urban gas projects concentrated in the eastern and southern regions (approximately 71% of gas sales volume in 2023 will come from this area), followed by CHINA RES GAS and TG SMART ENERGY.
