Power Assets 0006

[winston]

not vested

No dividend, but $67b in hand

by Esther Yu

Power Assets (0006) will not declare any special dividend for shareholders despite holding [b]HK$67 billion cash.[/b]

At the annual general meeting yesterday, chairman Canning Fok Kin-ning said the firm is not going to pay out a long awaited special interim dividend since it is currently engaged in three major deals where capital is best to be kept for use.

"I am not going to lie to you," Fok said to shareholders, "We waited two years for good investment opportunities, and here it is now."

He said that a confidential agreement with a local government has been signed. `We will know the results by July or August ... there could be more than 10 percent return if it goes through."

What Fok is referring to is likely the firm's bid with Cheung Kong Infrastructure (0001) on the 50 percent share of the Australian power network Ausgrid sold by the New South Wales state government, which has a market value of US$7.2 billion (HK$56.16 billion).

Power Assets issued a notice yesterday saying that - apart from the announced HK$7 billion injection to the Canada-based oil firm Husky Energy that belongs to the same group, where it partnered with CKI - it is also working on two more substantial deals that are "at an advanced stage of a tender process" and at an early stage, respectively.

Power Assets said previously that a dividend will be paid out if there is no acquisition made before the annual general meeting.

The HK$67 billion cash was largely generated from the HK Electric (2638) spin-off back in 2014.

Shareholders were disappointed by the decision, but Fok insisted that keeping the money for acquisition is indeed the "best for shareholders and the firm's capability to generate more interests."

After the no-pay announcement, Power Assets saw its share price fall by 2.7 percent to close at HK$74.90 yesterday as the worst performing blue chip for the day.

Meanwhile, at the annual general meeting of Cheung Kong Infrastructure (1038), major shareholder of Power Assets, chairman Victor Li Tzar-kuoi, was asked if a merger plan of the two will be raised again soon after the failed attempt last year.

"It has failed but we still need to move forward," he said.

Source: The Standard

[winston]

not vested

<Research Report>JPM Expects POWER ASSETS Proposed Special Div Distribution May Involve $10.7B; Reiterated Overweight

JP Morgan issued a research report, expecting the share prices of POWER ASSETS(00006.HK) and CKI HOLDINGS(01038.HK) will increase due to the joint acquisition over DUET Group, coupled with the expectation that POWER ASSETS will distribute $5 special dividend per share.

The research house estimated that DUET Group will raise CKI HOLDINGS EPS by 5% and that of POWER ASSETS by 4%. POWER ASSETS was reiterated at Overweight.

JP Morgan expected that if POWER ASSETS pays special dividend of $5 per share, the company's cash will be reduced by $10.7 billion; yet, it will still have $47 billion cash in hand after distribution.

Source: AAStocks Financial News

[winston]

Special dividend declared

by Esther Yu

Power Assets (0006) declared its long- awaited special dividend yesterday. The HK$5 per share dividend will be payable in cash on February 28.

An estimated HK$1.07 billion is expected to be paid out in the special dividend.

Up to HK$60 billion cash was generated from the spinoff of HK Electric (2638) in 2014, but no dividend was paid to shareholders, who had voted down the merger with Cheung Kong Infrastructure (1038) in 2015.

Power Assets then engaged itself in overseas acquisitions through co- ventures with CKI.

Earlier this month, Power Assets, together with Cheung Kong Property (1113) and CKI, made an acquisition bid on Australian electricity firm Duet, which it announced on the v same day its intention to declare the special dividend.

Source: The Standard

http://www.thestandard.com.hk/section-n ... ?id=179062

[winston]

not vested

DBS Initiates POWER ASSETS (00006.HK) at Buy, TP $62.91

2019/12/24

DBS Group Research in its report initiated POWER ASSETS (00006.HK) at Buy with a 12-month target of $62.91.

The broker opined that POWER ASSETS' higher visibility in Hong Kong business will drive growth in the coming five years despite slowdown in overseas M&A.

Source: AAstocks.com

[winston]

not vested

Daiwa Upgrades POWER ASSETS (00006.HK) to Outperform, TP Lifted to $57.9

2019/08/05

POWER ASSETS (00006.HK) slumped 2% after the release of interim results on 1 August.

The net profit and core profit dropped 8% and 3%, yet Daiwa opined the company remains the best performer among traditional defensive names, which are preferred in wake of future economic downside.

The management reiterated that the company will maintain a stable DPS of $2.8 for long term, Daiwa said.

Daiwa lifted the rating to Outperform from Hold with target price raised to $57.9 from $54.

Source: AAStocks Financial News

[winston]

not vested

Power Assets Holdings (OTCPK:HGKGF)(OTCPK:HGKGY)

Investment thesis: This is the classic stock I would recommend to my grandma. Probably one of the most boring shares out there, it trades around book value and a forward P/E below 14x.

It also currently offers a yield of almost 6.5%, which I see as slow-growing, but extremely safe (A-rated balance sheet).

PAH’s most valuable assets are a 40% stake in UK Power Network (UKPN), a 33.4% stake in Hong Kong Electric Investments (HKEI), and some Australian assets, including Powercor Australia and SA Power Networks.

PAH has very close ties to CK Hutchinson: CKH’s subsidiary CK Infrastructure Holdings (OTCPK:CKISF)(OTCPK:CKISY) owns about 40% of PAH shares.

The reason for owning PAH directly over CKI or CKH, is that the company is a pure-play on regulated utility assets, on which PAH derives 80% of its revenues.

The high yield is hence safe, secured by the business’s stable cash flow and low degree of uncertainty.

Source: Seeking Alpha