ENN ENERGY (02688) shares have continued their decline, falling nearly 5% in recent trading. At the time of writing, the stock was down 4.64% to HK$43.54, with a turnover of HK$124 million.

The drop follows news that the company's proposed privatization plan has been terminated.

In a research note, Bank of America Securities stated that the termination of the privatization deal could negatively impact ENN ENERGY's corporate governance image, suggesting the parent company might prioritize its own interests over those of minority shareholders. The termination also reflects the increasing challenges facing gas distributors, as the anticipated structural decline in gas costs following Middle East conflicts may be delayed.

Citigroup noted that the privatization transaction had been awaiting approval from the China Securities Regulatory Commission for nearly a year, with an unclear timeline for meeting all conditions.

From a fundamental perspective, the outlook for ENN ENERGY appears weak, characterized by sluggish retail gas sales growth, a decline in new household connections, and falling integrated energy sales. The bank believes the cancellation of the privatization plan indicates there are no positive catalysts for the stock in the near term.

The bank forecasts a dividend yield of 6.4% for the company in 2026.