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Morgan lifts CR Gas (01193) to HK$33.6
Morgan Stanley raised its target price for China Resources Gas (CRG)(01193) to
 HK$33.6 from HK$32.5, and maintained its "overweight" rating.

  The research house said the removal of gas tariff policy overhang in June, and the 
government's initiative for rural areas' coal-to-gas conversion through its "2+26 cities"
plan has helped to drive the gas stocks year-to-date. But CRG still looks attractive at
current levels.
  Morgan adjusted its 2017-19 earnings estimates by 0.6%-1.7% mainly due to the changes in
gas sales volume growth but partially offset by a decline in the gas sales dollar margin.
  As alternative and more prudent plays on the theme of rural areas' coal-to-gas 
conversion, Morgan looks to CRG, given its more prudent approaches in pursuing the growth
potential on: (1) it only secures rural areas' coal-to-gas projects close to their 
existing projects to enjoy the synergies; and (2) it only use piped gas (no LNG) to
minimize the margin fluctuation risk.

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