HK Electric Investment Remains Overvalued Despite Weaker Unit Price
Despite a decline of 8% in HK Electric Investments' unit price from a peak of HKD 8.20 in July this year, we continue to see the utility trust as overvalued against our unchanged fair value of HKD 5.50. The trust has outperformed the Hang Seng Index with investors staying defensive amid market volatility and concerns over Chinese and U.S. trade relations. We expect this to be the case for the remainder of the year if uncertainty in the market persists.Our narrow economic moat rating on the trus...
HK Electric Investments is an investment trust based in Hong Kong. Co. maintains an investment focus on the power industry. Co.'s operations comprise the generation, transmission, distribution and supply of electricity to Hong Kong Island and Lamma Island. Co. conducts is operations through its principal operating subsidiary, The Hongkong Electric Company (HEC). HEC's power generation facility is the Lamma Power Station which has an aggregate installed capacity of 3,737 megawatt (MW). Co. provides electricity to 575,000 registered customers on Hong Kong Island and Lamma Island.
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