HSBC Global Research said it noted QIC (unlisted), through holding vehicle Lochard Energy has filed a claim against EnergyAustralia - a subsidiary of CLP Holdings (00002) - of AUD967m (HKD5.6bn) for knowingly providing misleading information during the process for selling its Iona gas storage plant in Victoria, Australia.
The research house believes CLP's turnaround story in Australia is organic, driven by internal cost improvement, efficiency gains, and a better demand/supply balance in the electricity market. Guidance of growing EBITDA from Australia by 30% over a three-year period during 2016-18e is so far on-track (2016: +10%), which could lift the region's ROA from an existing 5%. HSBC has a Hold rating mainly because of valuation, as the stock's dividend yield of 3.5% is near historical low, although fundamentals remain in high quality and defensive, following recent finalization of the Scheme of Control agreement in HK with a new permitted return for 2018-2033.
HSBC maintained its target price of HK$84 for CLP.
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