UBS: Fast Take: UK Utilities "UK Domestic supply: 5% sales tax to be cut..."

研报英文原文证据摘录

UBS: Fast Take: UK Utilities "UK Domestic supply: 5% sales tax to be cut..."

Valuation Method and Risk Statement

Utilities face a wide range of commercial, technical, operating, regulatory and political or

policy risks which can be hard to assess completely, including the risk of adverse

developments in the framework for regulated utility network as well as commodity and

regulatory risk in power generation, retail and other areas.

E.ON:

The main drivers of the Utilities sector include: commodities, generation margins, demand

evolution, regulatory changes, M&A, regulation, government policy, credit conditions and

currency movements. Any adverse change in these would modify our view on these stocks.

Company-specific risks for e.on include unfavourable changes to regulatory frameworks in

networks; increased competition in retail or deterioration in payments behaviour. Our e.on

price target is derived from a DCF-based sum of the parts approach cross-checked with

relative multiples.

Centrica:

Centrica is subject to competitive pressure in the UK and Irish consumer- and business-facing

businesses (in both supply and services). Customers can switch and take large marginal/gross

profits elsewhere. There is energy commodity exposure mainly in the UK and Europe. There is

also regulatory and political risk, in that the product it sells most of (Energy) is a large fraction

of household expenditure, and a place in which Government has historically intervened (e.g.

with domestic price caps imposed by the UK Government in 2018 and increased capital

requirements from OFGEM). There is also exposure to global LNG prices. Finally, Centrica

owns 20% of the UK nuclear fleet and a 69% stake in the Spirit UK and Dutch gas production

business, where there are operational risks.