Hong Kong and China Gas, commonly known as Towngas, says its mainland piped gas unit is this year targeting as many as seven projects on the mainland worth HK$1 billion in an effort to win a larger slice of the green energy market across the border.
Managing director Alfred Chan Wing-kin (pictured) of Towngas China said yesterday that three targeted mainland projects has been bought so far this year, taking its total to 69 despite keen competition.
Strong demand and cool weather helped fuel 'a double-digit' rise in gas sales in the first quarter of this year, which look set to lift full-year growth by 15-20 per cent, he said.
'The strong sales will continue in coming years,' he said after the firm's annual shareholder meeting. Chan said Towngas China wanted to capitalise on Beijing's 12th five-year plan, which targets a more than doubling of the use of clean fuel to 26 billion cubic metres by 2015 from 10 billion cubic metres in 2010.
Chan said there was a slim chance Towngas China would buy piped-gas projects from its parent company.
The firm's parent company, traded as Towngas, owns 66.5 per cent of Towngas China, and runs about 34 city piped-gas projects mostly in the Yangtze River Delta.
Citigroup analyst Pierre Lau said the new projects Towngas China is in discussions over are located largely in industrial zones and target heavy consumers.
He said that if the projects were 'too large' for Towngas China then its parent company would look to buy such projects.
Lau has a buy rating for Towngas China shares as it is growing rapidly. He added Towngas had the highest price-earnings ratio among Hong Kong-listed gas utilities and that it was composed of various businesses ranging from gas supply, to new energy as well as water supply and sewage treatment.
Hong Kong and China Gas shares fell 4 HK cents to HK$18.26 yesterday while Towngas China decreased 8 HK cents, or 1.52 per cent, to HK$5.17.
Number of gas projects Towngas China owns on the mainland already. The firm is looking to expand that total by seven this year