Been watching SGAS, not holding. My interest in microcap natural gas companies in China started in 2009 with China Gas Holdings (HK:0384), then I bought Kunlun Energy (HK:0135) when it was still called CNPC. China has a very aggressive 5 year plan to expand natural gas, but from what I can tell, so far it really hasn't panned out to create huge EPS gains in the stocks I have held or was looking at. Revenues from constructing new distribution pipelines has some nice profit margins, but plain old revenues from supplying customers in the distribution networks seems to have thin margins. In addition, with China now importing considerable amounts of natural gas from new sources, including pipelines from across the border that were just completed, the international wholesale prices were reportedly quite a bit higher relative to prices retail customers were used to paying, which may make it harder for affected companies to make profits on gas distribution without some kind of government price subsidies in the supply chain. Therefore, I decided not to play natural gas in China for the time being until I find a company where the growth due to expansion is pretty certain. SGAS is a fairly small company with only a few networks, and I was watching it to see if it acquired massive new customers via new distribution networks, but so far I didn't see any major changes in the last year, although it's been a few months since I read the SEC filings so I might have missed something. The other negative is that SGAS is pretty thinly traded, so you can move the PPS by trading on one day. SGAS seemed to correlate with all other China stocks during the pullback last summer, and has come back somewhat, but unless I knew of company-specific expansions, I wouldn't hold my breath waiting for some huge EPS increase or PPS appreciation this season. Just my opinion FWIW, not an expert in natural gas.
AI
