Citigroup has increased its target price for HK & CHINA GAS (00003) by 7%, from HK$7.00 to HK$7.50, while maintaining a "Neutral" rating. The company faces challenges including lower retail natural gas sales margins in mainland China. Due to slightly lower-than-expected earnings projections for 2025, the bank has reduced its net profit forecasts for 2026–2027 by 5–7%. Citigroup cited three reasons for retaining the "Neutral" rating: 1) a sustainable dividend of HK$0.35 per share, equating to an expected dividend yield of 4.8% in 2026; 2) low-risk Hong Kong operations, which contribute half of its earnings; and 3) improvements in its advanced biofuels business, although it is projected to account for less than 5% of total earnings in 2026.