Weakness in earnings was driven by lower contribution from associate HK, CP HKD8.10, Buy), higher finance costs, and RMB weakness, offsetting growth in gas volume from Beijing. As a Beijing-centric utility with diversification elsewhere, we believe BEH’s growth outlook could be clouded by slower expansion in water treatment and implications of oil price weakness for its oil facility in Russia. Going forward, gas volume in Beijing could moderate as it is subject to seasonal demand for heating based on temperature, but a potential introduction of non-gas services (e.g. kitchen appliance, gas insurance) in line with its peers in other cities could be a catalyst for growth.