[ET Net News Agency, 4 August 2020] J.P. Morgan said CLP Holdings (00002) is the more
defensive name among HK utilities, with 60% of earnings from Hong Kong's Scheme of Control
regulated return.
Its 1H operating earnings (excluding fair value adjustments) were down 3%, mainly due to
a net loss in Australia's retail business. This was partially offset by steady earnings
growth in HK and better-than-expected performance in China despite COVID-19.
While conditions in Australia are expected to remain tough in 2H with potential
headwinds from lower power prices, JPM expects stable growth in HK earnings to support
CLP's flat DPS growth, providing a 4.2% yield. Within HK utilities, it prefers CLP and CK
Infrastructure (01038).
JPM maintained its"overweight" rating on CLP, with a price target of HK$90.8. (KL)