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Citi Initiate BGBS with a Buy Rating and Target Price of HK$0.4

HONG KONG, CHINA - Media
OutReach
 - 8 January 2019 - Citi
issued a research report on
Beijing Gas Blue Sky Holdings
Limited

("the Company"
or "Beijing Gas Blue Sky", together with its
subsidiaries, the "Group", HKSE stock code: 6828)
today, initiate it
with a Buy rating and target price of HK$0.4.

 

Citi expects BGBS to complete at least
five acquisitions in 2019-20E and will gain superior profit growth in expansion.
It expects that, BGBS EPS will grow at 60% CAGR in 2018-20E, driven by profit
contribution from its 29% owned Caofeidian LNG terminal, and gas sales volume
growing at 145% 2018-20E CAGR.

 

With strong support from Beijing Gas
Group, largest shareholder of BGBS, Citi expects more quality asset injections
will happen in the future. It also expects that, Beijing Gas Group will
consolidate BGBS as a subsidiary so that BGBS could obtain better financing
terms with SOE connections. The report stated that, the recent share price volatility
looks unrelated to its fundamentals. It is optimistic with BGBS's future
development and expects the Company to issue a positive alert.

About Beijing Gas Blue Sky
Holdings Limited

Beijing Gas Blue Sky Holdings
Limited ("Beijing Gas Blue Sky", HKSE stock
code: 6828) is an integrated natural gas provider, distributor and operator,
with an emphasis on the midstream and downstream natural gas development. Our
natural gas business includes: (i) construction and operation of compressed
natural gas ("CNG") and liquefied natural gas ("LNG") refueling stations for
vehicles; (ii) construction of natural gas pipelines and operation of city gas
projects by providing piped gas; (iii) direct supply of LNG to end-users; and
(iv) trading and distribution of CNG and LNG.

 

The Group has adapted to the "One Belt One Road"
policy, and focus on operating and investing natural gas business. The Group is
actively expanding its business development and distribution, as well as
continues to gradually expanding the scale of operations. Currently, the Group
has business presence in several provinces in Northeast China, East China,
Central South China and Southwest China, including Liaoning Province, Jilin
Province, Shandong Province, Shanxi Province, Anhui Province, Zhejiang
Province, Hubei Province, Guizhou Province, Sichuan Province and Hainan
Province, etc. The Group is committed to its vision: "develop clean
energy, enhance customer value, create a beautiful blue sky". In the
future, it will continue to actively investing and developing natural gas
business, as well as participating in the development of natural gas industry
value chain.

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