1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Investment Research at:https:/ The 22

2、ndedition of the EM Sentiment SurveyClick to viewPushingthe accelerator into2026 Gas volume picked up from 4Q25 on heat demand,but trend is unchanged as industrial use remains a weak point We see a mild recovery this year,rather than a strong rebound,therefore cash flow and dividends are key Prefer

3、ENN(Buy)for solid operations and restructuring deal;retain Buy on Kunlun and TSE;adjust TPs for ENN and Kunlun 2025 was a struggle:We expect gas utilities under our coverage to see earnings growth for 2H25 ranging between-7%and+1%YoY,except for CRG,which is set for a strong rebound(+55%YoY)on a low

4、base effect.Industry data suggests heating demand slightly picked up in 4Q25,although demand from commercial and industrial(C&I)users remained weak.Dollar margins appeared on track to expand by around RMB1cent/cm(c2%)because of better residential pricing policies.During 2H25,the sector operating env

5、ironment remained stable,although we expect new connections to have declined by double digits.In this report,we preview results for 2H25 and 2025,pending release in March 2026,and update our forecasts and target prices.2026 cash flows and dividends remain the focus:Going into 2026,we stick with our

6、stock selection strategy based on dividend resilience and quality driven by high yielders with strong cash flows and balance sheets;see Looking for shelter II,30 April 2025.This year could be characterized as a period of mild recovery as we expect retail gas demand to grow by 3-4%YoY(2025e:0-3%),whi