[ET Net News Agency, 6 August 2020] Nomura lowered its target price for Power Assets
Holdings (PAH)(00006) to HK$49 from HK$62.55 and maintained its "neutral" rating.
The research house said PAH's 1H net profits declined 40% in 1H, mainly due to a one-off
non-cash HK$780m UK deferred tax charge and the expiry of operating rights in two power
plants in China. Stripping out the one-off, underlying profits would have declined a
milder 14%, mainly due to the adverse effects of COVID-19 pandemic and unfavorable forex.
While its dividends safe with an attractive yield of 6.4% in 2020, Nomura noted that the
looming uncertainties over regulatory resets is likely to cap near-term valuation upside.
It cut its 2020 net profit estimate by 17% to reflect the one-off item in 1H and lower
returns from the UK and Australia owing to COVID-19's impact on consumption. (KL)