The Hong Kong and China Gas Company Limited

0003.HK

Hong Kong Stock Exchange

Exchange

Hong Kong Stock Exchange

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Mixed

Growth

Good

Cash Flow

Strong

Stability

Mixed

Valuation

Mixed

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Winston Score History

The full picture

Hong Kong and China Gas Co Ltd, known as Towngas, is a utility company that supplies piped natural gas to homes and businesses across Hong Kong and mainland China. Its core products include gas supply, gas appliances, and related installation and maintenance services. Towngas has been operating in Hong Kong since 1862, making it one of the oldest utility companies in the region.

The company earns money through gas distribution fees, appliance sales, and service contracts. It operates a vast pipeline network across Hong Kong and has expanded into dozens of cities in mainland China through joint ventures and partnerships. Its moat comes from the high cost of building pipeline infrastructure, which makes it very difficult for competitors to enter its markets. The main risk the company faces is the long-term shift toward electricity and renewable energy, which could reduce demand for piped gas over time.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+7.3% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+25.0% YoY

YoY Growth Rate

EPS growth accelerating

Cash Position

Cash flow positive

HK$66.3B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

The Hong Kong and China Gas Company Limited is growing revenue at 7% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

23.9%

Thin — 23.9% gross margin

Profit after running costs

Operating Margin

15.0%

Healthy — 15.0% operating margin

Return on the money invested

ROCE

2.6%

Weak — 2.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth

Sales YoY

+1.5%

Nearly flat sales (+1.5% YoY)

Profit growth

EPS YoY

+16.7%

Earnings growing fast (+16.7% YoY)

Healthy double-digit earnings growth — what compounders look like.

How steady the profit is

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash

Cash Conversion

165%

Turns 165% of profit into real cash

Spare cash per sale

FCF Margin

9.5%

Modest free cash flow (9.5%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns

Debt / Equity

1.04

Elevated debt (1.04)

Covers its interest

Interest Cover

1.62x

Dangerous — barely covers interest (1.6x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

Price vs profit

P/E Ratio (TTM)

23.4x

no trend

Growth-priced — P/E 23.4

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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