The rating on Towngas China Co. Ltd. (TCCL) reflects strong demand and growth potential for piped gas in China, and the captive market for the company's secured piped-gas projects. It also reflects the strong support that TCCL derives from being an associate of the Hong Kong and China Co. Ltd. (Towngas; A+/Stable/--). These strengths are partly offset by the uncertain regulatory risks in China, TCCL's heavy reliance on income from connection fees, and its still weak standalone financial profile. TCCL benefits from the Chinese government's encouragement of the development and use of clean energy. It should also benefit from the attractive outlook for China's gas distribution industry over the medium to long term because of increasing demand for piped gas...
Companies mentioned in this report are: Towngas China Co. Ltd.,Hong Kong and China Gas Co. Ltd. (The)
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