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The Hong Kong and China Gas Company (0003) Fair Value & Analysis

Utilities · HK · Market cap HK$121B

TH The Hong Kong and China Gas Company 0003 · HK
PriceHK$6.75
Fair ValueHK$4.79
Upside-29.0%
Quality54/100
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Mixed Growth
Solidly profitable · 10.5% net margin
Moderate debt · generates free cash flow
5.22% dividend yield
Trails peers (5/15)
Moderate moat 53/100
Evidence: Medium Range HK$3.31 – HK$5.99 Share as image

Fair value as of: Aug 13, 2026

From 26 valuation models · updated yesterday

Fair value updated Aug 13, 2026, revised from HK$5.08 to HK$4.79 (−5.7%) since Aug 2, 2026. Share price +1.3% over the past month.

A solid business, but screening 29% overvalued on our models.

What matters now

  • The price sits above even our optimistic bull case (HK$5.99). The favourable scenario is already priced in.
  • Solid but not exceptional quality (54/100) and above fair value, neither a clear bargain nor a standout compounder.
  • A fairly wide model range (HK$3.31 to HK$5.99) leaves room in how you read the outcome.
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Price vs Fair Value (5 years)

HK$10.32 HK$4.58 Fair Value HK$4.79 Mar 2021 Aug 2026

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 13, 2026.

How to read this chart

60‑month range HK$4.58 – HK$10.32 · fair‑value band HK$3.31 – HK$5.99 · the HK$6.75 price screens above the HK$4.79 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 13, 2026.

Full chart & analysis →

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Analysis

The Hong Kong and China Gas Company (0003) currently trades at HK$6.75, while our model-based Fair Value estimate is HK$4.79, implying the stock looks roughly 29.0% overvalued today. The Quality Score stands at 54/100 (solid quality), in the Utilities sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: medium).

Over the trailing twelve months, The Hong Kong and China Gas Company generated revenue of HK$54.3B at a net margin of 10.5%. Revenue declined 4.2% year over year. It earns a return on equity of 9.6%. Net debt stands at HK$54.5B. Fundamentals as of Aug 13, 2026

Our scenario range runs from HK$3.31 (bear case) to HK$5.99 (bull case); at HK$6.75, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 10% below its 52-week high and 7% above its 52-week low, currently below its 200-day average. For context, the median of 10 Utilities peers we cover trades at 2% fair-value upside, at -29%, 0003 screens richer than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Model Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence
Highest evidence
Growth DCF HK$1.42 HK$3.15 HK$5.67 80
Residual Income HK$2.79 HK$3.07 HK$4.08 76
Rev-Margin DCF HK$1.67 HK$4.04 HK$6.81 74
All 26 models by family
DCF Models
FCF DCF HK$1.38 HK$3.36 HK$6.44 38
Owner Earnings HK$0.7300 HK$2.33 HK$4.82 31
5Y Revenue Exit HK$1.67 HK$4.06 HK$7.14 39
5Y EBITDA Exit HK$1.99 HK$4.67 HK$7.83 41
5Y P/E Exit HK$1.59 HK$3.91 HK$6.37 38
10Y Revenue Exit HK$1.41 HK$3.58 HK$6.57 36
10Y EBITDA Exit HK$1.74 HK$4.01 HK$7.09 37
10Y P/E Exit HK$1.48 HK$3.48 HK$5.97 35
Earnings-Based
Graham-Dodd HK$2.07 HK$6.92 HK$9.26 54
Lynch FV HK$1.57 HK$2.24 HK$2.91 50
PEG = 1.0 HK$1.57 HK$2.24 HK$2.91 46
EPV HK$1.21 HK$1.74 HK$2.21 59
Dividend Discount
Gordon GGM HK$3.21 HK$6.68 HK$10.60 70
DDM Multi-Stage HK$3.21 HK$5.49 HK$7.01 61
Multiples
P/E Multiple HK$4.12 HK$5.49 HK$6.86 63
P/S Multiple HK$3.89 HK$5.18 HK$6.48 58
P/B Multiple HK$3.89 HK$5.18 HK$6.48 55
EV/EBIT HK$2.93 HK$4.56 HK$6.20 53
EV/EBITDA HK$2.82 HK$4.42 HK$6.02 54
EV/Revenue HK$1.99 HK$3.69 HK$5.39 43
Asset-Based
NCAV (Graham) HK$1.59 HK$2.13 HK$3.18 50
Growth DCF
Growth DCF HK$1.42 HK$3.15 HK$5.67 80
Rev-Margin DCF HK$1.67 HK$4.04 HK$6.81 74
Economic Profit
Residual Income HK$2.79 HK$3.07 HK$4.08 76
ROIC Compounder HK$1.21 HK$1.74 HK$2.21 72
Growth Earnings
Growth-Adj P/E HK$3.55 HK$5.08 HK$6.60 68

Widest divergence: Dividend Discount (HK$5.49) versus Economic Profit (HK$1.74). Highest evidence: Growth DCF (80).

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Key figures & financial health

Revenue (TTM) HK$54.3B
Revenue growth (YoY) -4.2%
Net margin 10.5%
Return on equity 9.6%
Free cash flow HK$5.4B FY2025
P/E ratio 21.7 as of Jul 1, 2026
More key figures
Operating margin 13.0%
EPS (TTM) HK$0.1600
Dividend yield 5.2%
EPS growth (YoY) +2.1%
Net debt HK$54.5B FY2025

Figures from reported company fundamentals · as of Aug 13, 2026. TTM = trailing twelve months.

Quality Score breakdown

Overall quality 54/100

Of which business quality 50 · Market factors (momentum, volatility) 54

Profitability 31
Margins and returns on capital today
Quality Growth 30
Are margins and returns improving?
Cashflow 59
Earnings quality: real cash, not paper profit
Fin. Strength 33
Balance sheet, leverage, solvency risk
Investment 86
Disciplined investing over empire-building
Low Volatility 98
Calm price path (market factor)
Momentum 34
Price trend over the last 3–12 months (market factor)
52W Momentum 36
Distance to the 52-week high (market factor)
Net Issuance 82
Buybacks instead of dilution

Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.

About the company

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas, water supply and energy services in Hong Kong and Mainland China.

Full company description

The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas, water supply and energy services in Hong Kong and Mainland China. It is involved in the provision of renewable energy solutions, piped city-gas projects, gas supply chain, water supply, and urban waste utilization projects, as well as new energy exploration and utilization ventures. The company also offers piping installation services; piping design services for different properties and retrofit projects; kitchen design solutions; kitchen cabinets, residential kitchen appliances, residential gas water heaters, clubhouse dehumidifiers, clubhouse pool heating, and clubhouse bbq stoves; and automatic meter reading systems. In addition, it provides network connectivity, data center, and ICT services, as well as engineering, procurement, and construction services. Further, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Additionally, it is involved in water supply and wastewater treatment activities; green energy businesses; property development and investment activities; manufacturing of polyethylene piping and fittings; and the software development, solution implementation, and systems integration activities, as well as food and green waste treatment project. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

The Hong Kong and China Gas Company reported revenue of HK$54.3B in FY2025 versus HK$53.6B in FY2021, a compound +0.4%/yr. Reported net income was HK$5.7B in FY2025, compounding +2.6%/yr from FY2021.

Growth Quality 70/100
Revenue is growing, but margins or cash flow do not fully confirm the trend.
Latest Revenue (FY 2025)
HK$54.3B
Latest YoY
−2.1%
Avg. growth/yr (3Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
−3.8%
Avg. growth/yr (5Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+5.8%
Avg. growth/yr (26Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.
+9.0%
Revenue +0.4%/yr
FY21 HK$53.6B
FY22 HK$61.0B
FY23 HK$57.0B
FY24 HK$55.5B
FY25 HK$54.3B
Net income +2.6%/yr
FY21 HK$5.1B
FY22 HK$5.4B
FY23 HK$6.2B
FY24 HK$5.7B
FY25 HK$5.7B
Character of growth · EPS growth decomposed (2014-2025) −2.5 % p.a.
Revenue per share +7.1 pp

of which total revenue +7.1 pp · buybacks/dilution +0.0 pp

EBIT margin −1.6 pp
Tax rate −0.8 pp
Residual (interest, one-offs) −7.2 pp

Absolute contributions in percentage points per year; they sum to the EPS growth rate. Start and end points are 3-year averages (details on hover).

0003 screens 29% overvalued. Compare with Naturgy Energy Group →

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The Hong Kong and China Gas Company · Fair Value
HK$4.79 −29%Fair Value
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Cite: Fair Value Calculator (2026). "The Hong Kong and China Gas Company Fair Value". https://www.fairvalue-calculator.com/stock/0003

Peer Group

Utilities - Regulated Gas · 104 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Quality Score 54 · Above median
Fair Value upside −29% · Bottom 25%
Return on equity (TTM) 10% · Above median
Return on assets 3% · Below median
Net margin (TTM) 10% · Above median
Operating margin (TTM) 13% · Above median
Revenue growth -4% · Below median
Dividend yield (TTM) 5.2% · Top 25%
Debt / equity 0.73× · Higher than median

Valuation Multiples vs Utilities - Regulated Gas median · lower = cheaper

P/E (TTM) 21.7× · Pricier than median
P/B 2.04× · Pricier than median
P/S (TTM) 2.23× · Pricier than median
P/FCF 2.9× · Pricier than median
EV/EBITDA 13.4× · Pricier than 75% of peers
PEG 2.85× · Pricier than 75% of peers

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

VALUE 0 · sector 27
FUTURE 0 · sector 0
PAST 38 · sector 34
HEALTH 64 · sector 87
DIVIDEND 100 · sector 67

VALUE 0: the price sits above our fair-value range.

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

None of the checked exposures detected

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

Similar stocks

10 more Utilities - Regulated Gas stocks, each showing price versus our Fair Value estimate (as of Aug 13, 2026).

Stock Price Fair Value vs Fair Value
Naturgy Energy Group NTGY €28.94 €31.58 +9%
Atmos Energy Corporation ATO $169.59 $85.67 -49%
NiSource Inc NI $42.01 $28.59 -32%
Uniper SE UN0 €47.45 €48.32 +2%
GAIL (India) Limited GAIL ₹177.95 ₹130.21 -27%
Adani Total Gas Limited ATGL ₹660.35 ₹101.36 -85%
ENN Natural Gas Co 600803 ¥17.32 ¥25.71 +48%
ENN Energy Holdings 2688 HK$47.16 HK$107.98 +129%
China Suntien Green Energy Corporation 600956 ¥7.26 ¥7.37 +2%
China Resources Gas Group 1193 HK$15.86 HK$28.25 +78%

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Frequently asked questions

Is The Hong Kong and China Gas Company (0003) overvalued or undervalued?
As of Aug 13, 2026, our model estimates a fair value of HK$4.79 versus a price of HK$6.75, about −29% (overvalued).
What is the fair value of 0003?
Our model-based fair value for The Hong Kong and China Gas Company is HK$4.79 (as of Aug 13, 2026), built from audited fundamentals. The current price is HK$6.75.
What is the quality score of 0003?
The Hong Kong and China Gas Company has a Quality Score of 54/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the revenue of The Hong Kong and China Gas Company (0003)?
The Hong Kong and China Gas Company reported trailing-twelve-month revenue of about HK$54.3B (latest available figure, as of Aug 13, 2026).
What is the net profit margin of 0003?
The net profit margin of The Hong Kong and China Gas Company is about 10.5%, meaning it keeps roughly 10.5% of revenue as net income. Based on the latest reported figures.
Does The Hong Kong and China Gas Company pay a dividend?
The Hong Kong and China Gas Company currently shows a dividend yield of about 5.22% relative to its recent price (as of Aug 13, 2026).

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.

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