[ET Net News Agency, 18 March 2020] Citi Research lifted its target price for HK
Electric Investments (HKEI)(02638) to HK$8.3 from HK$7.5 and upgraded its rating to
"neutral" from "sell".
The research house believes HKEI's profit should rise on an expanding asset base (a 5.4%
CAGR in 2019-23) of guaranteed returns (8.243% ROA in 2019). It also noted interest-cost
savings from refinancing of a US$750m term note, which has a coupon of 4.25% pa and
matures in December 2020. Citi added a wider dividend yield (4.1% in 2020) premium to the
US$ 10-year bond yield.
Citi raised its 2021 net profit forecast by 5% to reflect higher SOC (Scheme of Control)
profits and lower interest costs. Citi said a "buy" call is not justified as the tariff
rise in early 2021 might not be large enough to generate the maximum permitted return next
year. (KL)
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02638 HKELECTRIC-SS
Nominal 
4.680 +0.030 (+0.645%) Research Report
18/03/2020 17:53
{I-bank focus}Citi upgrades HK Electric-SS (02638) to HK$8.3
| Remark: | Real time quote last updated: 24/04/2024 12:31 |
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