The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it will re-cover China's gas utility stocks. Stock selection preferences are Kunlun Energy (00135), Xinao Energy (02688), China Resources Gas (01193), and Xinao (600803.SH) in that order. Among them, Kunlun Energy and Xinao Energy were given an “additional” rating, while the rest of the companies received a “neutral” rating.

J.P. Morgan believes that the industry can provide 5% to 6.5% dividend income opportunities, and profits are expected to grow moderately. Therefore, when selecting stocks, the bank focuses on dividend resilience, highly attractive valuations, and room for increase in profit forecasts.

The bank pointed out that Kunlun Energy's performance has outperformed the Hang Seng Index and its H share peers since this year. Relatively defensive profits, share repurchases, and a steady lower dividend limit from 2026 to 2028 have supported the stock price. However, its liquefied natural gas (LNG) terminal business is still undervalued by the market.

In terms of Xinao Energy, J.P. Morgan believes that the company has stable dividend payment prospects and has achieved a track record of profit growth in businesses other than connectivity and gas sales. The bank preferred to directly hold Xinao Energy, while Xinao Stock A shares were given a “neutral” rating due to reasonable valuation.

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