[ET Net News Agency, 10 November 2017] UBS Global Research lowered its target price for
Power Assets (PAH)(00006) to HK$59 from HK$65, and maintained its "sell" rating.
The research house estimated PAH has sufficient cash to pay another special dividend of
HK$5/share, after which the large cash pile that PAH had at the beginning of 2016 would be
depleted.
As a result, investors now face the prospect that the company's low growth outlook could
become a stock overhang. UBS believes that infrastructure investment deals by the group
are likely to be increasingly be led by CK Assets Holding (CKAH)(01113) and CKI (01038),
and PAH will either take a small stake or be left out. This is mainly because its cash
balance is diminished. As a result, earnings and dividend growth will be lower than its
parent company.
With sterling up relative to the US$ and HK$, the research house marked currency
exchange to market and lifted its 2017/2018E EPS by 4%/6%. (KL)