China resources Gas fell 2% but Nomura still calls for buying

Shareholder Morgan Stanley and Credit Suisse Big Hand discount 22% (HK $4.6) placing 166 million shares of China Resources Gas opened this morning, the share price has fallen by 1.87% to HK $5.26, trading 3.81 million shares.　　Nomura issued a report saying it maintained the buying rating of the unit and set its target price from HK $4.7 to HK $7, a premium of 33% per cent on the market. Nomura is bullish on China's gas distribution industry because of the government's support policy and China's transition to low-cost clean energy has led to a strong growth in gas demand and stable profit margins. Considering the potential value-added of Fuzhou project, the weighted average capital cost of huarun gas is lowered from 7.9% to 7.4%, and the imminent increase in asset injection is expected to further enhance the value. And with the first round of asset injections (probably in the second half of 2009), the liquidity of the unit could be further enhanced.