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Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

We maintain our forecast for PAH’s full-year 2016 net profit to be relatively flat at HKD 7.8 billion. The additional contribution from the acquisition of Husky Energy’s midstream assets is not expected to be material in 2016.  We think PAH could propose a special dividend payout of around HKD 8.00 per share, or 30% of its cash, if the firm is unsuccessful in its bid for Australian distribution asset Ausgrid, which should be known by the end of August.We think there is upside risk to our estimate of PAH’s earnings, as (1) its U.K. assets are seeing cost cuts mitigate recent tariff resets better than we estimated, especially if the government opts to cut corporate tax rates; and (2) its Australian power assets are expected to attain some offsetting payments following a paring in its recent tariff resets. However, if the pound sterling weakens below 1.30 to the U.S. dollar, U.K. contributions, which make up 50% of PAH’s net profit, could be further dampened.Analysts: Jennifer Song &amp; Lorraine Tan, CFA

We maintain our forecast for PAH’s full-year 2016 net profit to be relatively flat at HKD 7.8 billion. The additional contribution from the acquisition of Husky Energy’s midstream assets is not expected to be material in 2016.  We think PAH could propose a special dividend payout of around HKD 8.00 per share, or 30% of its cash, if the firm is unsuccessful in its bid for Australian distribution asset Ausgrid, which should be known by the end of August.We think there is upside risk to our estimate of PAH’s earnings, as (1) its U.K. assets are seeing cost cuts mitigate recent tariff resets better than we estimated, especially if the government opts to cut corporate tax rates; and (2) its Australian power assets are expected to attain some offsetting payments following a paring in its recent tariff resets. However, if the pound sterling weakens below 1.30 to the U.S. dollar, U.K. contributions, which make up 50% of PAH’s net profit, could be further dampened.Analysts: Jennifer Song &amp; Lorraine Tan, CFA

Power Assets Holdings Interim Results In Line; No Special Dividend Yet