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αSK Primers

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<ul>
 <li>
<a href="https://smartkarma.com/entities/enn-natural-gas-co-ltd">ENN Natural Gas</a> is a leading vertically-integrated natural gas distributor in China, poised to benefit from the country's long-term transition towards cleaner energy sources.</li>
 <li>The company exhibits a strong dividend profile, with a high current yield and a robust history of dividend growth, signaling a commitment to shareholder returns.</li>
 <li>A recent significant strategic setback was the failure of its ambitious US$11.6 billion plan to privatize its affiliate ENN Energy Holdings in June 2026, citing inability to secure regulatory approvals, which has eroded investor confidence and highlighted significant regulatory risks.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
ENN Natural Gas is a leading vertically-integrated natural gas distributor in China, poised to benefit from the country's long-term transition towards cleaner energy sources.
  The company exhibits a strong dividend profile, with a high current yield and a robust history of dividend growth, signaling a commitment to shareholder returns.
  A recent significant strategic setback was the failure of its ambitious US$11.6 billion plan to privatize its affiliate ENN Energy Holdings in June 2026, citing inability to secure regulatory approvals, which has eroded investor confidence and highlighted significant regulatory risks.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: ENN Natural Gas (600803 CH) - Aug 2026

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>We've now cleared the one-year mark since <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> first announced a cash/scrip Offer from controlling shareholder <a href="https://www.smartkarma.com/entities/enn-natural-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:16456:1" rel="noopener">ENN Natural Gas (600803 CH)</a> (ENN NG).</li>
<li>Apart from the ambiguity surrounding the value to be assigned to the scrip into newly-listed ENN-NG H-shares; CSRC, the listing watchdog, has yet to sign off. This should be forthcoming.</li>
<li>By my calcs, I see at least 30% upside to ENN Energy's shares here. The market is implying an unreasonable 67% discount for ENN NG's Hs vs. the As. </li>
</ul>


We've now cleared the one-year mark since ENN Energy (2688 HK) first announced a cash/scrip Offer from controlling shareholder ENN Natural Gas (600803 CH) (ENN NG).
Apart from the ambiguity surrounding the value to be assigned to the scrip into newly-listed ENN-NG H-shares; CSRC, the listing watchdog, has yet to sign off. This should be forthcoming.
By my calcs, I see at least 30% upside to ENN Energy's shares here. The market is implying an unreasonable 67% discount for ENN NG's Hs vs. the As. 


<ul>
<li>On the 26th March, <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> announced a cash/scrip Offer from <a href="https://www.smartkarma.com/entities/enn-natural-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:16456:1" rel="noopener">ENN Natural Gas (600803 CH)</a> (ENN-NG), its largest shareholder.</li>
<li>The pushback is that the scrip portion pivots off the value of newly-listed ENN-NG H-shares. And the IFA's theoretical assessment on such leaves a lot to be desired.</li>
<li>A redacted version of ENN-NG's application proof is now out. Curiously, the share ratio - new ENN-NG H Shares for each ENN shares - is noticeably absent</li>
</ul>


On the 26th March, ENN Energy (2688 HK) announced a cash/scrip Offer from ENN Natural Gas (600803 CH) (ENN-NG), its largest shareholder.
The pushback is that the scrip portion pivots off the value of newly-listed ENN-NG H-shares. And the IFA's theoretical assessment on such leaves a lot to be desired.
A redacted version of ENN-NG's application proof is now out. Curiously, the share ratio - new ENN-NG H Shares for each ENN shares - is noticeably absent


ENN Energy (2688 HK): ENN Natural Gas' Application Proof Is Out. Interesting For What Is Not Present

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> is not required to submit a merger control filing to the SAMR, suggesting it is making a step ahead in meeting the pre-conditions. </li>
<li>The use of onshore bank loans and cash balance as a refinancing source and consideration payment will lower financing costs, boosting the value of ENN Natural Gas H-share.</li>
<li>The current share price is 9.3 and 17.7% below the low-bound and high-bound of our estimated value range. It is also less vulnerable to the current tariff war.</li>
</ul>



ENN Energy (2688 HK) is not required to submit a merger control filing to the SAMR, suggesting it is making a step ahead in meeting the pre-conditions. 
The use of onshore bank loans and cash balance as a refinancing source and consideration payment will lower financing costs, boosting the value of ENN Natural Gas H-share.
The current share price is 9.3 and 17.7% below the low-bound and high-bound of our estimated value range. It is also less vulnerable to the current tariff war.


ENN Energy (2688 HK): Privatisation Progressing Well Ahead

<ul>
<li>We calculated that after the privatisation of <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a>, the EPS of <a href="https://www.smartkarma.com/entities/enn-natural-gas-co-ltd" target="_blank" data-smartkarma-citation="entities:16456:1" rel="noopener">ENN Natural Gas (600803 CH)</a> will be Rmb1.94 for FY25F and Rmb2.11 for FY26F.</li>
<li>By using ENN Energy's undisturbed PER (with and without a 10% discount) and <a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a>'s ex-cash PER, ENN-NG H-share is worth 6.8-7.9x for FY25F and 6.3-7.2x for FY26F.</li>
<li>ENN-NG H-share is hence valued at HK$14.11-16.37, implying that ENN Energy's value under the privatisation proposal is HK$66.02-72.67, which is lower than Somerly's HK$80 estimate.</li>
</ul>


We calculated that after the privatisation of ENN Energy (2688 HK), the EPS of ENN Natural Gas (600803 CH) will be Rmb1.94 for FY25F and Rmb2.11 for FY26F.
By using ENN Energy's undisturbed PER (with and without a 10% discount) and Kunlun Energy (135 HK)'s ex-cash PER, ENN-NG H-share is worth 6.8-7.9x for FY25F and 6.3-7.2x for FY26F.
ENN-NG H-share is hence valued at HK$14.11-16.37, implying that ENN Energy's value under the privatisation proposal is HK$66.02-72.67, which is lower than Somerly's HK$80 estimate.


ENN Energy (2688 HK): Valuing ENN Natural Gas H-Share

China

Enn Natural Gas Co.,Ltd. offers natural gas engineering services. The Company provides natural gas engineering investment, gas station construction, and energy equipment distribution services. Enn Natural Gas also operates coal materials, chemicals,  and biopharmaceutical products trading businesses.

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ENN Natural Gas (600803 CH)

Primer: ENN Natural Gas (600803 CH) - Aug 2026

ENN Natural Gas is a leading vertically-integrated natural gas distributor in China, poised to benefit from the country's long-term transition...

αSK Primers

ENN Energy (2688 HK) Is A Buy

I see considerable upside to ENN Energy shares here. Plus the FY25 divi of HK$2.35/share should be added. The implied discount for ENN NG's Hs is...

David Blennerhassett

ENN Energy (2688 HK): ENN Natural Gas' Application Proof Is Out. Interesting For What Is Not Present

I still would not enter here. The H-share price may surprise to the downside. The Scheme may even get voted down. Unless you have a strong...

David Blennerhassett

ENN Energy (2688 HK): Privatisation Progressing Well Ahead

ENN Energy is progressing on meeting pre-conditions, with no merger control filing needed. Refinancing with onshore bank loans and using cash...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Primer: ENN Natural Gas (600803 CH) - Aug 2026

ENN Natural Gas is a leading vertically-integrated natural gas distributor in China, poised to benefit from the country's long-term transition...

αSK Primers

ENN Energy (2688 HK) Is A Buy

I see considerable upside to ENN Energy shares here. Plus the FY25 divi of HK$2.35/share should be added. The implied discount for ENN NG's Hs is...

David Blennerhassett

ENN Energy (2688 HK): ENN Natural Gas' Application Proof Is Out. Interesting For What Is Not Present

I still would not enter here. The H-share price may surprise to the downside. The Scheme may even get voted down. Unless you have a strong...

David Blennerhassett

ENN Energy (2688 HK): Privatisation Progressing Well Ahead

​ENN Energy is progressing on meeting pre-conditions, with no merger control filing needed. Refinancing with onshore bank loans and using cash...

Osbert Tang, CFA

ENN Energy (2688 HK): Valuing ENN Natural Gas H-Share

With privatisation of ENN Energy, ENN-NG H-share is valued at HK$14.11-16.37, implying ENN Energy's value at HK$66.02-72.67, lower than Somerly's...

Osbert Tang, CFA

ENN Energy is progressing on meeting pre-conditions, with no merger control filing needed. Refinancing with onshore bank loans and using cash...