Update To Reflect 2021 Cash Flow Details, Minimal Change to CKI and PAH Estimates, FVE Unchanged

We refresh our cash flow model to reflect CKI's and Power Assets', or PAH's, publication of their 2021 annual reports with the full cash flow statements. There is minimal change to our earnings estimates and our fair value estimates remain at HKD 62 for CKI and HKD 53 for PAH. Share prices of both CKI and PAH have outperformed the Hang Seng Index year to date, which we believe is due to their defensive attributes. Both CKI and PAH are able to pass on higher costs to customers as the bulk of earnings are regulated. We note U.K. gas and electricity regulator Ofgem raised the price cap on utility bills by 54% as of April 1. We currently have a preference for CKI over PAH given better upside to its fair value but we note that CKI has slightly greater sensitivity to currency headwinds.