Lyon Securities has released a research report stating that the withdrawal of the privatization proposal by the parent company of ENN ENERGY (02688), ENN Natural Gas Co., Ltd. (600803.SH), triggered recent selling pressure and a decline in the share price.

The firm believes the stock has now fallen to an attractive level, forecasting a 2026 dividend yield of 7%. It has lowered its target price from HK$75 to HK$58.5, noting that the current valuation, equivalent to a forecasted 2023 price-to-earnings ratio of 6.3 times, is appealing.

Lyon maintains its "Outperform" rating on the stock.

The firm has reduced its profit forecasts for ENN for the current and next year by 5% and 22%, respectively.

Lyon anticipates that ENN ENERGY's net profit for 2026 will grow by approximately 18% year-on-year to about RMB 6.9 billion, primarily benefiting from a contribution of around RMB 1.4 billion in gross profit from wholesale gas operations.