UBS released a research report stating that HK & CHINA GAS (00003) reported core operating profit of HKD 6 billion for the 2025 fiscal year, a 4% year-on-year increase, largely in line with the bank's and market expectations. The growth was primarily driven by robust performance in the Hong Kong gas business and lower finance costs, partially offset by a 2% decline in profit from the mainland city gas segment due to weak new connection volumes. The bank assigned a "Neutral" rating to the stock with a target price of HKD 7. The report indicated that profit from the mainland city gas business benefited from an increase in gross profit per cubic meter from HKD 0.52 to HKD 0.54, but this was partly offset by a decrease in new connection volumes from 1.68 million households to 1.45 million households, while gas sales volume remained largely flat. Losses in the green fuel business segment narrowed to HKD 158 million. UBS expects investors to hold a neutral to slightly negative view on the results. Consequently, the bank maintains a generally neutral stance on the sector, believing that city gas sales growth will slow, and upstream price volatility may pose short-term pressure on unit profits. However, UBS holds a positive view on the development of EcoCeres, whose capacity expansion is progressing faster than expected, potentially accelerating order intake and attracting strategic investors.