HK Electric Investments: Strong Financials and Sustainable Energy Commitment Support Buy Rating

HK Electric Investments & HK Electric Investments (HKCVF – Research Report), the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Patricia Yeung from DBS maintained a Buy rating on the stock and has a HK$6.50 price target.

Patricia Yeung’s rating is based on HK Electric Investments’ solid financial standing and commitment to sustainable energy. Despite a slight decline in attributable profit for FY24, the company maintained its total distribution per unit, aligning with expectations. The modest increase in net tariff for 2025 reflects a balanced approach to pricing, supported by the company’s ongoing investments in infrastructure and green energy transition, including the construction of an LNG terminal and the phase-out of coal-fired power plants by 2035.
HK Electric Investments’ stable cash flow and healthy balance sheet, with a net debt-to-net total capital ratio of 51%, provide a strong foundation for continued distribution. The company’s debt profile is largely fixed-rate, reducing exposure to interest rate fluctuations. The Buy rating, with a target price of HKD6.50, is attractive for income-oriented investors, offering a dividend yield of approximately 6%, despite the higher-for-longer interest rate environment.