CK Infrastructure and Power Assets: PNGL Acquisition Is Decent but Doesn’t Move the Needle

CKI Holdings’ and Power Assets Holdings’, or PAH, purchase of the holding company of Northern Ireland gas distributor Pheonix Natural Gas Ltd, or PNGL, for GBP 312.6 million is decent, in our view, but should only lift annual earnings by around 1% for CKI and PAH. Our fair value estimates for both companies are unchanged, remaining at HKD 53.30 per share for CKI and HKD 48.60 per share for PAH. Both companies are trading in 4-star territory, but we prefer CKI as we expect dividend growth versus PAH’s flat dividends. CKI is yielding 5.9% at the current share price and PAH at 6.3%.