[ET Net News Agency, 6 August 2020] Citi Research lowered its target price for Power
Assets (PAH)(00006) to HK$50 from HK$56.5 and maintained its "buy" rating.
The research house said PAH's 1H net profit decline was mainly due to (i) a HK$780m
one-off non-cash deferred tax gain reversal from the UK without corporate tax rate cut;
(ii) less profit from China for the end of operating rights at two coal-fired plants in
2019; and (iii) HK$180m net profit cut resulting from one-off expense incurred from
COVID-19
epidemic.
Interim DPS was unchanged at HK$0.77. Citi assumed PAH's DPS to be sustainable ahead
despite profit declines in 2021-22 due to return reset amid lowered interest rates. (KL)