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Equity Bottom-Up

Narrow moat-rated ENN Energy posted 2016 net profit of CNY 2.15 billion, up 5.6% year over year. Excluding other gains and losses, which include CNY 601 million of impairment loss on goodwill, CNY 292 million loss on foreign exchange and CNY 308 million loss on repurchase of senior notes, as well as amortization of share option expenses, net profit of CNY 3.21 billion was slightly ahead of our expectation.We maintain our fair value estimate of HKD 50.00, pending more details from an analyst briefing which should provide more detail on gas volume growth, new connection growth and margins trends. We think ENN remains attractive at the current price level.Analyst: Chokwai Lee

Narrow moat-rated ENN Energy posted 2016 net profit of CNY 2.15 billion, up 5.6% year over year. Excluding other gains and losses, which include CNY 601 million of impairment loss on goodwill, CNY 292 million loss on foreign exchange and CNY 308 million loss on repurchase of senior notes, as well as amortization of share option expenses, net profit of CNY 3.21 billion was slightly ahead of our expectation.We maintain our fair value estimate of HKD 50.00, pending more details from an analyst briefing which should provide more detail on gas volume growth, new connection growth and margins trends. We think ENN remains attractive at the current price level.Analyst: Chokwai Lee

ENN Energy Reports Solid 2016 Results; Shares Remain Undervalued