JPMorgan has released a research report indicating that HK & China Gas (00003) has underperformed its peers by approximately 15% since the start of the year, driven by market concerns over weak earnings from its mainland China operations. However, the company's better-than-expected first-half results are likely to alleviate these worries and support a share price rebound, prompting the bank to lift its target price from HK$7.3 to HK$7.75 and upgrade the rating from "Neutral" to "Overweight".

The bank has raised its earnings per share forecasts for HK & China Gas for 2026 and 2027 by 5.7% and 4.4%, respectively, to HK$0.34 each, reflecting higher profitability assumptions for sustainable aviation fuel. JPMorgan further anticipates that should the company's earnings growth momentum persist, it may consider increasing its dividend per share.