China Natural Gas jump

Shares of China Natural Gas jump after analyst begins coverage with 'Buy' rating

• On 3:05 pm EDT, Monday October 12, 2009

COLUMBUS, Ohio (AP) -- Shares of China Natural Gas jumped Monday after an analyst started coverage of the company with a "Buy" rating and said the company stands to benefit from the Chinese government's efforts to develop a clean fuel sector.

Analyst Sean Jiang of Roth Capital Partners set a price target of $18 for China Natural Gas, which sells gas to vehicular fueling terminals and commercial, industrial and residential customers through its distribution networks in two provinces in China.

Jiang said key drivers include the construction of new filling stations and a liquefied natural gas processing plant that is expected to begin production early next year. At the same time, favorable industry trends that include rapid growth in natural gas consumption, the build-out of a nationwide pipeline infrastructure, rising automobile ownership and increasing environmental awareness should help the company, he wrote in a research note.

Shares of China Natural Gas climbed 88 cents, or 6.4 percent, to $14.58 in trading Monday afternoon. The shares have traded between $3 and $18 over the past year.