XNGSY - ENN Energy: Positive On Diversification Beyond Gas Distribution But Recent Proposed Share Transfer Creates Overhang
Elevator Pitch
Hong Kong-listed Chinese gas distributor ENN Energy Holdings Limited (XNGSY) (XNGSF) [2688:HK] currently trades at 15.1 times consensus forward FY2019 P/E representing a premium to its historical five-year average forward P/E of approximately 13 times. The valuation premium is partly justified by its diversification beyond its core gas distribution business to integrated energy and value-added services, its gas procurement advantage with its parent's LNG terminal and M&A opportunities in the gas distribution business.
However, with ENN Energy's share price hitting an all-time high of HK$89.70 in August 2019 and