20150623-HSBC-昆仑能源（0135）：REDUCE：WEAK_GAS_DEMAND，SHAANJING_IV_TIMING_AND_RAMP-UP_CLOUD_EARNINGS_OUTLOOK-669609

Valuation and risks：We maintain our Reduce rating with TP of HKD7.2.Our TP is derived from the SOTP of DCF（WACC of 10% based on a risk-free rate of 3.5%，market risk premium of 10%，beta of 1.0，cost of debt of 3.5% and a 25% debt weighing）for the E&P business（HKD0.4 per share）and 8-12x 2015e PE target multiples for the gas related segments：gas sales（8x），LNG processing（10x），LNG terminal（10x），and pipeline business（12x）.We think the target multiples are reasonable after referencing the trading multiples of other Chinese gas utility companies.Upside risks：sharp rebound of oil prices，supportive policy towards natural gas vehicles and execution of asset injections.