JP Morgan released a research report stating that CHINA RES GAS (01193) significantly underperformed the broader market after announcing its annual results. While the bank believes the stock price has stabilized, it has not observed any improvement in key operational indicators that could drive the stock higher in the near term.

The bank believes that the city gas business profitability may continue to face pressure, given limited room for volume growth and margin expansion, coupled with continued decline in new connection volumes. Although the comprehensive services business is expected to return to positive growth in the second half due to a low base, the company's overall profitability may still record a single-digit year-over-year decline, with growth visibility for 2026 remaining low.

The bank has lowered its profit forecasts for 2025-27 by 3% to 4%, while slightly raising the target price from HK$18.5 to HK$19 and maintaining a "Neutral" rating.