# Hong Kong and China Gas (0003.HK)

Canonical: https://gigainvestors.com/s/0003.HK

Analysis as of: 2026-10-16T07:34:57.419Z. Financial observations: FY1999–FY2025.

Listing currency: HKD. Reporting currency: HKD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: HKD 7.20 per share; close as of 2026-10-15.

Estimated value: low HKD 3.10 per share, central HKD 3.46 per share, high HKD 3.95 per share. Buy at or below the central value HKD 3.46 per share. Valuation as of 2026-10-16T07:34:57.419Z; scenarios are not confidence intervals.

Expected annual return: 6.0% at the stated quote. About 6.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; HK 10-year bond 4.0% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.25×

- FY2017: 0.23×

- FY2018: 0.21×

- FY2019: 0.20×

- FY2020: 0.21×

- FY2021: 0.32×

- FY2022: 0.29×

- FY2023: 0.32×

- FY2024: 0.15×

- FY2025: 0.15×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 10.9pp below the typical margin (limit 4pp)

- ROIC, median of available years: 7.7%

- ROIC, second-lowest year: 6.2%

- Typical minus recent gross margin: 10.9 pp

- Typical gross margin (annual median): 34.8%

- Recent gross margin (lower of latest and 3-year median): 23.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 16.3%

- ROIC including acquisitions, ten-year median: 4.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 7.9%

- FY2017: 7.6%

- FY2018: 8.1%

- FY2019: 6.3%

- FY2020: 6.8%

- FY2021: 11.7%

- FY2022: 13.1%

- FY2023: 13.8%

- FY2024: 6.2%

- FY2025: 5.9%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.71×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: HKD 20B

- Net income, five-year total: HKD 28B

- Return on incremental invested capital: 1.4%

- Working capital / revenue, annual change: 0.5 pp

- Working capital / revenue, change between three-year averages: 3.2 pp

- Working capital / revenue, final three-year average: 15.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.99×

- FY2023: 0.31×

- FY2024: 0.56×

- FY2025: 0.79×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 7.9% vs 6.2%

- Per-share earnings: 0.40 to 0.31 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.0%

- Ordinary dilution, 5-year annual growth: 0.0%

- Market cap gain: HKD -126B

- Cumulative retained earnings: HKD 5.6B

- Diluted shares, 10-year annual growth: -0.0%

- Diluted shares, 5-year annual growth: 0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -3.3%

- Per-share value change: HKD -0.09

- Per-share value, starting three-year median: HKD 0.40

- Per-share value, ending three-year median: HKD 0.31

- Buybacks concentrated in cheaper years (correlation): -0.80

- Average buyback yield: 0.2%

- Buyback history: 5 years

- Debt-funded buybacks: No

- Acquisition spending: HKD 5.7B

- Cumulative net income, 10 years: HKD 66B

- ROIC, first three-year median: 7.9%

- ROIC, last three-year median: 6.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: HKD 0.40

- FY2017: HKD 0.45

- FY2018: HKD 0.50

- FY2019: HKD 0.38

- FY2020: HKD 0.33

- FY2021: HKD 0.27

- FY2022: HKD 0.29

- FY2023: HKD 0.33

- FY2024: HKD 0.31

- FY2025: HKD 0.30

### accounting: pass

- Sloan accruals: -3.0%

- Receivables to sales index (DSRI): 0.98×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.85×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -0.9%

- FY2017: -0.1%

- FY2018: -0.0%

- FY2019: -2.6%

- FY2020: -3.0%

- FY2021: -3.3%

- FY2022: -2.6%

- FY2023: -2.9%

- FY2024: -2.1%

- FY2025: -3.0%

## Holders

## Price story

Down 41% since Dec 2021 · sales -2.1%

Story as of 2026-10-16T10:00:03.191Z; price observation 2026-10-15.

Price needs cash profits to grow 11.1% a year for ten years

### Sales · FY2024–2025

sales -2.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: HKD 29B 

- FY2017: HKD 32B 

- FY2018: HKD 39B 

- FY2019: HKD 41B 

- FY2020: HKD 41B 

- FY2021: HKD 54B 

- FY2022: HKD 61B 

- FY2023: HKD 57B 

- FY2024: HKD 55B 

- FY2025: HKD 54B 

### Gross margin · FY2025

gross margin 23.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 55.5% 

- FY2017: 51.7% 

- FY2018: 47.3% 

- FY2019: 31.0% 

- FY2020: 31.1% 

- FY2021: 26.2% 

- FY2022: 23.6% 

- FY2023: 38.6% 

- FY2024: 41.7% 

- FY2025: 23.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities regulated gas; annual sales are HKD 54.3 billion.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2025-12-31 (filed 2026-10-16T07:34:57.419Z); FY2025: revenue 54326300000; grossProfit 12979000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 0003.HK: The Hong Kong and China Gas Company Limited, together with its subsidiaries, produces, distributes, and markets gas, water supply and energy services in Hong Kong and Mainland China. It is involved in the provision of renewable energy solutions, piped city-gas projects, gas supply chain, water supply, and urban waste utilization projects, as well as new energy exploration and utilization ventures. The company also offers piping installation services; piping design services for different properties and retrofit projects; kitchen design solutions; kitchen cabinets, residential kitchen appliances, residential gas water heaters, clubhouse dehumidifiers, clubhouse pool heating, and clubhouse bbq stoves; and automatic meter reading systems. In addition, it provides network connectivity, data center, and ICT services, as well as engineering, procurement, and construction services. Further, the company offers consultancy and engineering contractor services, including utilities installation, infrastructure construction, and civil and building services engineering for public and private projects; and designs and manufactures gas meters and metering systems. Additionally, it is involved in water supply and wastewater treatment activities; green energy businesses; property development and investment activities; manufacturing of polyethylene piping and fittings; and the software development, solution implementation, and systems integration activities, as well as food and green waste treatment project. The Hong Kong and China Gas Company Limited was founded in 1862 and is headquartered in North Point, Hong Kong.

### Why customers stay

Margins ranged from 23.9% to 41.7% during 2023–25; it earns 7.7% on its capital.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2023-12-31 (filed 2026-10-16T07:34:57.419Z); FY2023: grossProfit / revenue = 38.6%.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2024-12-31 (filed 2026-10-16T07:34:57.419Z); FY2024: grossProfit / revenue = 41.7%.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2025-12-31 (filed 2026-10-16T07:34:57.419Z); FY2025: grossProfit / revenue = 23.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:57.419Z); 10-year return on capital observations [[2016,0.0792085286857058],[2017,0.07567454103250577],[2018,0.08145270534005417],[2019,0.06280998092730371],[2020,0.06847305714272496],[2021,0.11716266360778652],[2022,0.13076499405153813],[2023,0.1382534896907954],[2024,0.06232774319200313],[2025,0.058626250219975994]]; median 0.07744153485910579. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2016-12-31 (filed 2026-10-16T07:34:57.419Z); FY2016: growth capex 0; upkeep 6056700000; owner earnings 3617600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2017-12-31 (filed 2026-10-16T07:34:57.419Z); FY2017: growth capex 3629700000; upkeep 2374800000; owner earnings 8336500000. Growth capex / owner earnings = 0.4353985485515504.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2018-12-31 (filed 2026-10-16T07:34:57.419Z); FY2018: growth capex 4029800000; upkeep 2537200000; owner earnings 9420200000. Growth capex / owner earnings = 0.42778284962102714.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2019-12-31 (filed 2026-10-16T07:34:57.419Z); FY2019: growth capex 2519356854.0268135; upkeep 4533543145.9731865; owner earnings 5216576854.0268135. Growth capex / owner earnings = 0.4829521206194931.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2020-12-31 (filed 2026-10-16T07:34:57.419Z); FY2020: growth capex 488254807.66629314; upkeep 6806645192.333707; owner earnings 2230594807.666293. Growth capex / owner earnings = 0.21888995974895062.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2021-12-31 (filed 2026-10-16T07:34:57.419Z); FY2021: growth capex 5123300000; upkeep 3288600000; owner earnings 5107300000. Growth capex / owner earnings = 1.0031327707399214.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2022-12-31 (filed 2026-10-16T07:34:57.419Z); FY2022: growth capex 4809000000; upkeep 3525400000; cash acquisitions 339400000; owner earnings 5286827263.297704. Growth capex plus acquisitions / owner earnings = 0.9738165715648219.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2023-12-31 (filed 2026-10-16T07:34:57.419Z); FY2023: growth capex 0; upkeep 8427600000; cash acquisitions 0; owner earnings 1896912278.1085715. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2024-12-31 (filed 2026-10-16T07:34:57.419Z); FY2024: growth capex 0; upkeep 6460100000; cash acquisitions 0; owner earnings 3216287803.9401293. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/0003.HK.json#2025-12-31 (filed 2026-10-16T07:34:57.419Z); FY2025: growth capex 0; upkeep 5131600000; cash acquisitions 0; owner earnings 4482724134.08986. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:57.419Z); Dividend observations: [[2016,4185000000],[2017,4603200000],[2018,5063600000],[2019,5569900000],[2020,6025400000],[2021,6326600000],[2022,6531000000],[2023,6531000000],[2024,6531000000],[2025,6531000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 41.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 0003.HK SharesStats.PercentInsiders = 41.854 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 11.1% yearly over ten years; actual growth was 2.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:57.419Z); Ten-year compound average after fade. Initial solved rate 0.14704920861127946. Price 7.2; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.1825896652298999 → FY2025 0.240233405192372. Closing-price date 2026-10-15.

## Monthly share-price history (HKD per share)

- 2016-10: HKD 15.20 per share

- 2016-11: HKD 14.44 per share

- 2016-12: HKD 13.74 per share

- 2017-01: HKD 14.66 per share

- 2017-02: HKD 14.94 per share

- 2017-03: HKD 15.54 per share

- 2017-04: HKD 15.54 per share

- 2017-05: HKD 16.66 per share

- 2017-06: HKD 14.68 per share

- 2017-07: HKD 14.78 per share

- 2017-08: HKD 14.80 per share

- 2017-09: HKD 14.68 per share

- 2017-10: HKD 14.78 per share

- 2017-11: HKD 15.24 per share

- 2017-12: HKD 15.32 per share

- 2018-01: HKD 15.46 per share

- 2018-02: HKD 15.48 per share

- 2018-03: HKD 16.12 per share

- 2018-04: HKD 16.44 per share

- 2018-05: HKD 16.96 per share

- 2018-06: HKD 15.02 per share

- 2018-07: HKD 16.02 per share

- 2018-08: HKD 16.16 per share

- 2018-09: HKD 15.54 per share

- 2018-10: HKD 14.96 per share

- 2018-11: HKD 15.78 per share

- 2018-12: HKD 16.20 per share

- 2019-01: HKD 17.02 per share

- 2019-02: HKD 18.18 per share

- 2019-03: HKD 18.82 per share

- 2019-04: HKD 18.72 per share

- 2019-05: HKD 17.32 per share

- 2019-06: HKD 17.32 per share

- 2019-07: HKD 17.34 per share

- 2019-08: HKD 15.14 per share

- 2019-09: HKD 15.28 per share

- 2019-10: HKD 15.22 per share

- 2019-11: HKD 14.92 per share

- 2019-12: HKD 15.22 per share

- 2020-01: HKD 14.96 per share

- 2020-02: HKD 15.00 per share

- 2020-03: HKD 12.78 per share

- 2020-04: HKD 13.86 per share

- 2020-05: HKD 13.04 per share

- 2020-06: HKD 12.00 per share

- 2020-07: HKD 11.12 per share

- 2020-08: HKD 11.28 per share

- 2020-09: HKD 11.10 per share

- 2020-10: HKD 11.14 per share

- 2020-11: HKD 11.94 per share

- 2020-12: HKD 11.58 per share

- 2021-01: HKD 11.14 per share

- 2021-02: HKD 11.70 per share

- 2021-03: HKD 12.30 per share

- 2021-04: HKD 12.46 per share

- 2021-05: HKD 13.50 per share

- 2021-06: HKD 12.06 per share

- 2021-07: HKD 12.66 per share

- 2021-08: HKD 12.52 per share

- 2021-09: HKD 11.80 per share

- 2021-10: HKD 12.10 per share

- 2021-11: HKD 11.64 per share

- 2021-12: HKD 12.14 per share

- 2022-01: HKD 12.00 per share

- 2022-02: HKD 11.82 per share

- 2022-03: HKD 9.49 per share

- 2022-04: HKD 8.69 per share

- 2022-05: HKD 8.88 per share

- 2022-06: HKD 8.45 per share

- 2022-07: HKD 8.28 per share

- 2022-08: HKD 7.75 per share

- 2022-09: HKD 6.92 per share

- 2022-10: HKD 6.06 per share

- 2022-11: HKD 6.64 per share

- 2022-12: HKD 7.42 per share

- 2023-01: HKD 7.86 per share

- 2023-02: HKD 7.38 per share

- 2023-03: HKD 6.91 per share

- 2023-04: HKD 6.96 per share

- 2023-05: HKD 7.06 per share

- 2023-06: HKD 6.77 per share

- 2023-07: HKD 6.67 per share

- 2023-08: HKD 5.77 per share

- 2023-09: HKD 5.46 per share

- 2023-10: HKD 5.45 per share

- 2023-11: HKD 5.37 per share

- 2023-12: HKD 5.98 per share

- 2024-01: HKD 5.55 per share

- 2024-02: HKD 6.06 per share

- 2024-03: HKD 5.93 per share

- 2024-04: HKD 5.97 per share

- 2024-05: HKD 6.07 per share

- 2024-06: HKD 5.94 per share

- 2024-07: HKD 6.37 per share

- 2024-08: HKD 6.35 per share

- 2024-09: HKD 6.40 per share

- 2024-10: HKD 6.03 per share

- 2024-11: HKD 5.90 per share

- 2024-12: HKD 6.21 per share

- 2025-01: HKD 5.97 per share

- 2025-02: HKD 6.20 per share

- 2025-03: HKD 6.69 per share

- 2025-04: HKD 6.99 per share

- 2025-05: HKD 6.90 per share

- 2025-06: HKD 6.59 per share

- 2025-07: HKD 7.01 per share

- 2025-08: HKD 7.01 per share

- 2025-09: HKD 6.76 per share

- 2025-10: HKD 7.23 per share

- 2025-11: HKD 7.24 per share

- 2025-12: HKD 7.01 per share

- 2026-01: HKD 7.37 per share

- 2026-02: HKD 7.61 per share

- 2026-03: HKD 7.10 per share

- 2026-04: HKD 7.23 per share

- 2026-05: HKD 7.17 per share

- 2026-06: HKD 6.50 per share

- 2026-07: HKD 7.03 per share

- 2026-08: HKD 7.21 per share

- 2026-09: HKD 7.11 per share

- 2026-10: HKD 7.20 per share

## Annual estimated value (HKD per share)

- FY2016: low HKD 4.41 per share, central HKD 4.93 per share, high HKD 5.63 per share

- FY2017: low HKD 5.40 per share, central HKD 6.58 per share, high HKD 7.57 per share

- FY2018: low HKD 6.94 per share, central HKD 9.73 per share, high HKD 11.35 per share

- FY2019: low HKD 3.80 per share, central HKD 4.73 per share, high HKD 5.46 per share

- FY2020: low HKD 3.46 per share, central HKD 3.88 per share, high HKD 4.45 per share

- FY2021: low HKD 4.54 per share, central HKD 5.10 per share, high HKD 5.84 per share

- FY2022: low HKD 3.96 per share, central HKD 4.43 per share, high HKD 5.05 per share

- FY2023: low HKD 3.32 per share, central HKD 3.72 per share, high HKD 4.25 per share

- FY2024: low HKD 2.18 per share, central HKD 2.44 per share, high HKD 2.79 per share

- FY2025: low HKD 2.94 per share, central HKD 3.30 per share, high HKD 3.78 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations