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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Power Assets Holdings Ltd    0006   HK0006000050

POWER ASSETS HOLDINGS LTD

(0006)
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End-of-day quote. End-of-day quote Stock Exchange of Hong Kong - 05/23
54.2 HKD   +0.74%
05/20POWER ASSETS HOLDINGS LTD : Ex-dividend day for final dividend
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Power Assets Holdings Ltd : Hong Kong Electric Eyes up to $3.6 Billion From IPO

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01/12/2014 | 08:25pm EDT

Li Ka-shing plans to raise up to US$3.6 billion in a Hong Kong initial public offering this month of his Hong Kong electricity assets, in Asia's biggest float in over half a year.

HK Electric Investments, which owns power plants and electricity-distribution networks in the city, is selling 4.43 billion units in an indicative price range of HK$5.45-HK$6.30 each, it said in a statement late on Sunday. At the US$3.6 billion size, it will be the region's top deal since Suntory Beverage & Food Ltd raised US$4 billion from an IPO in Japan in June, according to Dealogic.

HK Electric will be listed as an investment trust--playing to investor demand for steady, high dividends in a low-interest-rate environment. The trust, being carved from Mr. Li's Power Assets Holdings Ltd., will provide a yield of 6.26%-7.24%. That is more than existing business trusts listed in Hong Kong--like telecom trust HKT Trust controlled by Mr. Li's son Richard which is trading at 5.5%. The U.S. 10-year Treasury bond is trading at 3% yield.

China state-owned electric utilities State Grid Corporation of China agreed to buy 18% of HK Electric Investments after the IPO while Oman Investment Fund, a sovereign wealth fund of the Oman government, agreed to subscribe 0.7%-0.8% of the total number of units issued. HK Electric is slated to list on Jan. 29, it said.

Power Assets originally planned to raise between US$4 billion-US$5 billion from the listing of HK Electric, but slashed the size of the IPO by nearly one-third because it wanted to keep a large stake in the electricity unit, according to a person with direct knowledge of the deal said Monday. Power Assets said in a statement it will own 49.9% of the trust after the listing.

The listing also gives Power Assets' Hong Kong electricity unit a separate identity. Formerly named Hong Kong Electric Holdings Ltd., the utility company began with supplying electricity to homes on the main island of Hong Kong. It has in the past decade expanded into Europe, buying stakes in U.K. electricity grids and a Dutch waste-management company, among others. Assets outside Hong Kong contributed to 53% of Power Assets' net profit in 2012, compared with 31% in 2009.

Like HKT, which holds fixed-line and data broadband assets in Hong Kong, HK Electric will be listed as a stapled trust, where investors get units in the trust as well as shares in the company that holds the trusts' underlying assets. Stapled trusts are subject to Hong Kong's regulations for securities, giving investors the same level of protection as shareholders of a listed company. HK Electric Investments will take investors' orders Jan. 14 and to list on the Hong Kong stock exchange on Jan. 29, it said.

HK Electric's IPO will help keep Hong Kong's status, regained late last year, as one of the world's top listing sites. Thanks to a slew of IPOs between 2009 and 2011, including the record US$22.1 billion Hong Kong-Shanghai listing of Agricultural Bank of China Ltd. in 2010, Hong Kong was the biggest venue globally for IPOs in those years. It fell out of the top three in 2012, but the listing of three Chinese banks late last year vaulted it up to second place after New York last year.

Goldman Sachs Group Inc. and HSBC Holdings PLC are the lead bankers on the HK Electric IPO, while Barclays PLC., BNP Paribas, Citigroup Inc., Deutsche Bank AG., DBS Bank, and Morgan Stanley are also handling the offering, the term sheet said.

Write to Prudence Ho at prudence.ho@wsj.com and Yvonne Lee at yvonne.lee@wsj.com

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Financials (HKD)
Sales 2019 1 546 M
EBIT 2019 1 339 M
Net income 2019 7 645 M
Finance 2019 2 455 M
Yield 2019 5,26%
P/E ratio 2019 14,89
P/E ratio 2020 14,54
EV / Sales 2019 72,7x
EV / Sales 2020 75,1x
Capitalization 115 B
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Mean consensus HOLD
Number of Analysts 11
Average target price 58,7  HKD
Spread / Average Target 9,1%
EPS Revisions
Managers
NameTitle
Chao Chung Charles Tsai Chief Executive Officer & Executive Director
Kin Ning Fok Chairman
Kee Ham Chan Chief Financial Officer
Chung Hin Wong Independent Non-Executive Director
Tzar Kuoi Li Non-Executive Director
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