Category

Utilities Sector

Mar 02
0

Daily Brief Utilities: China Everbright Water and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Everbright Water (1857 HK): More to Look Forward

China Everbright Water (1857 HK): More to Look Forward

By Osbert Tang, CFA

  • Weaker 2H22 and FY22 earnings are primarily caused by disruption from the pandemic, and the 18.7% share price retreat since 2022 should have well factored in an unexciting year.
  • Recovery of construction revenue, rebound in margin, completion of pipeline projects, increase in water tariffs and faster receivable collections are the key positive factors to watch. 
  • China Everbright Water (1857 HK) will generate ROE of 9.8% and 10.3% for FY23 and FY24. Such return profile renders its 3.5x PER and 0.35x P/B for FY23 inexpensive. 

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Feb 20
0

Daily Brief Utilities: China Longyuan Power and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Longyuan (916 HK): The Bull Story Should Continue

China Longyuan (916 HK): The Bull Story Should Continue

By Osbert Tang, CFA

  • The FY22 profit warning for China Longyuan Power (916 HK) reflected mostly items of one-off in nature and the weak result should be a matter of the past.
  • The Jan overall generation growth of 30.6% and wind power growth of 44.4% are very solid performance. With economic rebound and low comparison base, we expect growth to sustain.
  • Asset injection from CHN Energy and improvement in financial position through subsidy collection are positives, making its below 10x PERs for FY23 and FY24 attractive. 

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Feb 16
0

Daily Brief Utilities: HK Electric Investments and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • HK Electric Investments (2638 HK): MSCI Deletion Could Mark a Bottom

HK Electric Investments (2638 HK): MSCI Deletion Could Mark a Bottom

By Brian Freitas

  • HK Electric Investments (2638 HK) will be deleted from the MSCI Hong Kong Index at the close on 28 February. This was largely expected.
  • We estimate passive MSCI trackers will need to sell 172.3m shares (US$111m; 19.1 days of ADV to trade). That is a lot. But there are pre-positions on the stock.
  • HK Electric Investments (2638 HK) has underperformed its peers and now trades at a lower price to book. There could be outperformance post the MSCI deletion.

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Feb 15
0

Daily Brief Utilities: Adani Green Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Adani Group: Upcoming & Potential Index Impacts

Adani Group: Upcoming & Potential Index Impacts

By Brian Freitas

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Feb 03
0

Daily Brief Utilities: China Longyuan Power and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close

China Longyuan Power (916 HK) – High Probability 22% Rally Confirmed at the January Close

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • January 2023 confirmed a high probability bullish outlook when all 3 pillars were definitively triggered. 
  • Monthly Relative Strength Index (RSI) has an incredible multi-year history of confirming large upswings in 916 HK. January completed the 5th such bullish confirmation since 2014. Multi-month target at 12.945. 

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Jan 29
0

Daily Brief Utilities: Adani Transmission and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback

Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback

By Brian Freitas

  • The Adani Group stocks have taken a dive following the Hindenburg Research report. Group market cap is down more than US$47bn with company promoters taking the biggest hit.
  • The Adani Enterprises FPO is almost certain to be undersubscribed. MSCI, in an unprecedented step, is monitoring publicly available information and is seeking feedback from the investment community.
  • We find that the real float of some Adani Group stocks is much lower than the headline numbers and there could be selling if MSCI lowers the FIF.

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Jan 27
0

Daily Brief Utilities: SDIC Power Holdings and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Northbound Stock Connect Expansion: Updated Details

Northbound Stock Connect Expansion: Updated Details

By Brian Freitas

  • On 19 January, the HKEX clarified the liquidity criteria as well as treatment of Differentiated Voting Rights (DVR) stocks and the criteria for current Northbound stocks to become Sell-only.
  • We currently see 975 China A-shares becoming eligible for Northbound Stock Connect when the extension is implemented.
  • With the extension likely to be implemented in June, there will be additions to the MSCI China Index, FTSE All-World Index and FTSE All-Cap Index in August and September.

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Jan 24
0

Daily Brief Utilities: Electricite De France Sa and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • République Française/​​EDF: Squeeze-Out

République Française/​​EDF: Squeeze-Out

By Jesus Rodriguez Aguilar

  • On 6 July, the French Prime Minister said that France would have 100% of EDF. I recommended BUY at €8.98 in the wake of a very willing big-pocketed buyer.
  • The French state now holds 92.71% of voting rights in EDF, and intends to initiate the squeeze-out within three months from closing (up to 22 March).
  • Although the shares are still liquid, gross spread is 0-2 bps, and therefore there is no trade worth considering, in my view, just selling into the sustained purchase order/await squeeze-out.

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Jan 16
0

Daily Brief Utilities: Samchully, China Power International and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Misunderstandings & Truth About Samchully & Daesung Holdings Entering KOSPI 200
  • China Power International (2380 HK): A Look into the Positive Profit Alert

Misunderstandings & Truth About Samchully & Daesung Holdings Entering KOSPI 200

By Sanghyun Park

  • Hankyung’s report is a clear misunderstanding under the current index methodology. The possibility of Samchully and Daesung Holdings’ KOSPI 200 inclusion is NONE.
  • However, the issue of deteriorating the market representation of the K200 index, which is caused by the top stocks outside the index, is gaining attention in the local financial space.
  • So, we should prepare for the possibility that KRX will revise the methodology. In this case, an intense preemptive flow for the top names outside the KOSPI 200 can appear.

China Power International (2380 HK): A Look into the Positive Profit Alert

By Osbert Tang, CFA

  • China Power International (2380 HK) announced positive profit alert for FY22 at Rmb2.3-2.7bn, vs. Rmb516m losses in FY21. Such guidances are 14-34% ahead of current consensus forecasts.
  • Disposal and acquisition gains of Rmb2.15bn are the main contributors. As we see further clean energy injections and coal-fired disposals going forward, there is room for more such gains. 
  • Losses for core operations are Rmb300-700m in 2H22, a huge 73.5% YoY reduction. We will not read too much into HoH profitability retreat as this is due to hydropower seasonality.  

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Jan 14
0

Daily Brief Utilities: Naturgy Energy Group SA and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • IFM Increases Its Stake in Naturgy

IFM Increases Its Stake in Naturgy

By Jesus Rodriguez Aguilar

  • Australian institutional investor IFM has informed the Spanish National Securities Market Commission (CNMV) that it has increased its stake in Naturgy Energy Group SA (NTGY SM) to just over 14%.
  • Corporate politics: IFM is still far from the 17% threshold that would grant two sits on the Board of Naturgy (and the initial minimum acceptance condition in the partial offer).
  • Speculative buy (TP €27.42, DCF-based). IFM’s intention of increasing its stake may continue to drive up the share price.

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