Power Assets Will Have HKD 40 billion in Net Cash on UKPN Sale, Next Move Not Certain

Power Assets Holdings, or PAH, in the absence of acquisitions, is likely to see mid-single-digit earnings growth and stable cash flow that should maintain its dividend payout. PAH’s key utility assets include UK-based power and gas networks as well as Australian utility distribution companies. Together, the UK and Australian assets made up 70% of profit in 2025, which will fall to around 60% in 2027 on the sale of UK Power Networks assuming no new acquisitions. While PAH’s earnings and fair value estimates are sensitive to currency fluctuations, we don’t think the lower translated income will materially impact dividend payouts given PAH's net cash position. We think PAH's ordinary dividend is likely to be flat at HKD 2.82 per share during our five-year projected period but we think a special dividend is possible in 2027-28 given the proceeds from the UKPN sale.