[ET Net News Agency, 18 March 2020] Nomura raised its target price for HK Electric
Investments (HKEI)(02638) to HK$8.7 from HK$8.5 and retained its "neutral" rating.
With highly predictable cash flows and dividends, purely based on the mature Hong Kong
electricity market, HKEI has been particularly resilient against the recent global stock
market turmoil, the research house said.
Nomura does not see any chance of a dividend increment until FY2024, mainly due to
significant CAPEX requirements for adding three new 380MW gas-fired generators, the
widening yield spread against treasuries has "inorganically" created some sort of dividend
growth.
Nomura revised its FY2020 EPS forecast to 29.82c from 22.14c, due to less-than-expected
earnings impact from the new Scheme of Control (SOC). (KL)