Hong Kong Utilities: Opportunities in playing defence

Research evidence excerpt

Hong Kong Utilities: Opportunities in playing defence

3 July 2026

Hong Kong Utilities EquitiesElectric Utilities

Opportunities in playing defence Hong Kong

◆ CKI and PAH are cash rich, ready for sizable M&As; upside to Evan Li*

dividends is possible, although unlikely in the near future Head, Asia Energy Transition Research The Hongkong and Shanghai Banking Corporation Limited

evan.m.h.li@hsbc.com.hk

◆ Existing businesses see growth, including the UK and Australia +852 2996 6619

(inflationary adjustments) and Hong Kong (asset expansion) Yonghua Park*, CFA

Analyst, Asia Energy Transition

◆ Prefer CKI, followed by PAH, and CLP; upgrade PAH to Buy Theyonghua.park@hsbc.com.hkHongkong and Shanghai Banking Corporation Limited

(from Hold); downgrade HKE to Hold (from Buy); change TPs +852 3941 7005

Zoey Zhou*

CKI and PAH are ready to strike: Balance sheets at CKI and PAH have significantly Associate, Asia Energy Transition

The Hongkong and Shanghai Banking Corporation Limited

strengthened after their disposals of UK Power Networks and UK Rails (both unlisted), zoey.z.zhou@hsbc.com.hk

enhancing opportunities for meaningful acquisitions to fuel growth and/or special +852 3945 2400

dividends, although the latter may not be materialised until 2027e, in our view. Net cash

positions would be 24% and 42% over the respective equity value of CKI and PAH, on * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

our estimates. Any corporate restructuring within the group for better capital utilisation,

although uncertain, could be a positive catalyst, in our view. We upgrade PAH to Buy

(from Hold) and raise TP to HKD70 (from HKD56), reflecting favourable macro