[ET Net News Agency, 22 April 2020] Morgan Stanley lowered its target price for Power
Assets Holdings (PAH)(00006) to HK$53 from HK$57 and maintained its "equal-weight" rating.
Similar to CK Infrastructure Holdings' (CKI)(01038) investment holding structure, the
research house said PAH also generates less operating cash flow (mainly interest income
based on shareholder loans to associates), with the bulk of cash flow coming from
dividends from associates/JVs.
PAH generates around HK$5-6bn OCF (operating cash flow), and has little capex due to its
investment holding structure, which is just sufficient to pay its dividend of HK$6bn.
Morgan said PAH has a cash balance of HK$4.9bn by the end of 2019, which compared to its
debts of HK$3.3bn, suggesting it can leverage up to pay its dividend. (KL)