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CLP Holdings Ltd 00002

Morningstar Rating
HKD 62.25 −1.05 (1.66%)
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Company Report

CLP: Australian Revenue Uncertainty Offset by China Growth

We keep our fair value estimate for CLP Holdings at HKD 63 per share after raising our five-year profit outlook, but with lower income after 2028. We factor in a pickup in near-term growth in China profit contributions as renewable generation capacity is added, but we also increase the impact from the scheduled 2028 decommissioning of its 1,480 megawatt Yallourn coal-fired power plant to its Australian contributions. However, this has a limited impact on our valuation as we expect annual free cash flow to remain at HKD 10 billion-HKD 12 billion, similar to that seen in 2016-20. We think CLP is fairly valued, given its present outlook. Our valuation prices CLP at 12.5 times 2024 price/earnings and 1.4 times price/book, close to the average of its historical range.

Price vs Fair Value

00002 is trading at a 546% premium.
Price
HKD 63.30
Fair Value
HKD 28.00
Uncertainty
Low
1-Star Price
HKD 92.58
5-Star Price
HKD 26.20
Economic Moat
Fkhsz
Capital Allocation
Jmkccmml

Bulls Say, Bears Say

Bulls

Hong Kong's plan to be carbon neutral by 2050 could lift CLP's investment plan and support stronger growth in its Hong Kong income.

Bears

CLP’s ex-Hong Kong assets incomes and cash flows are weighed down by high fuel costs for a longer period than expected.

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News

Trading Information

Previous Close Price
HKD 63.30
Day Range
HKD 62.2063.65
52-Week Range
HKD 55.4067.35
Bid/Ask
HKD 62.20 / HKD 62.25
Market Cap
HKD 157.40 Bil
Volume/Avg
2.2 Mil / 2.8 Mil

Key Statistics

Price/Earnings (Normalized)
15.55
Price/Sales
1.83
Dividend Yield (Trailing)
4.90%
Dividend Yield (Forward)
4.90%
Total Yield
4.90%

Company Profile

CLP Holdings is the larger of the two electric utility companies in Hong Kong, serving 80% of the city population. It generates, transmits and distributes electricity to about 2.6 million customers in Kowloon and the New Territories through its wholly owned network. The business is regulated by the Hong Kong government with a permitted return on net fixed asset of 8.00%. Besides Hong Kong, the company has expanded its reach overseas, with generation and retail assets in Australia and generation assets in China, India, Taiwan, and Southeast Asia. Its Hong Kong activities made up more than 80% of recurring net profit in 2021.
Sector
Utilities
Industry
Utilities - Regulated Electric
Stock Style Box
Large Core
Total Number of Employees
8,041

Competitors

Valuation

Metric
00002
AGL
01038
Price/Earnings (Normalized)
15.5522.9213.49
Price/Book Value
1.561.310.88
Price/Sales
1.830.5918.05
Price/Cash Flow
8.814.3129.07
Price/Earnings
00002
AGL
01038

Financial Strength

Metric
00002
AGL
01038
Quick Ratio
0.410.800.86
Current Ratio
0.631.090.91
Interest Coverage
6.671.639.35
Quick Ratio
00002
AGL
01038

Profitability

Metric
00002
AGL
01038
Return on Assets (Normalized)
4.34%3.90%5.09%
Return on Equity (Normalized)
9.70%11.11%6.92%
Return on Invested Capital (Normalized)
6.46%7.09%5.55%
Return on Assets
00002
AGL
01038
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