HK Utilities: Model updates; sector likely to be range-bound in 3Q after YTD outperformance

研报英文原文证据摘录

HK Utilities: Model updates; sector likely to be range-bound in 3Q after YTD outperformance

J P M O R G A N Asia Pacific Equity Research

29 June 2026

HK Utilities

Model updates; sector likely to be range-bound in 3Q

after YTD outperformance

HK utilities have outperformed the Hang Seng Index by 13% YTD (HK utilities Power Equipment and Utilities

AC+~3% on average, HSI -10%) despite rate hike expectations. We believe this is a Stephen Tsui, CFA

function of the recent market volatility, which has led to investors flocking to (852) 2800-8592

defensive names. Valuation for the sector is not cheap at <5% yield (~40 bps above stephen.tsui@jpmorgan.com

the 10-year US yield on average, vs. historical >180bps since 2017), and hence we Vento Suen

are selective on our stock picks and we believe mainland China utilities like ENN (852) 2800-8546

Energy (>7% yield) offer better risk/reward trade-offs. We believe HK Utilities are vento.suen@jpmorgan.com

likely to be range-bound in 3Q. CLP Holdings is the most defensive name in our Alan Hon

HK utilities coverage, as >80% of its earnings came from HK last year with (852) 2800-8573

alan.hon@jpmorgan.com

minimal currency risk. For CK Infrastructure/Power Assets, the key focus would J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

be more updates on their M&A and management comments on potential special Morgan Broking (Hong Kong) Limited

dividends. While HK & China Gas may suffer from weak mainland gas earnings,

its associate Ecoceres (unlisted) may see a meaningful earnings turnaround on

higher SAF prices, and HKCG could offer an attractive entry point in the future,

if it offers a ~6% yield. For Earnings and PT changes for the stocks, please refer

to page 3.

• CK Infrastructure/Power Assets: We revise up our 2026E earnings by