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<Research>HSBC Research Favors CLP HOLDINGS/ HKELECTRIC-SS, Envisions HK Power Stocks to Benefit from NM Development
Recommend 16 Positive 20 Negative 13 |
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The latest Policy Address proposes the establishment of a Northern Metropolis (NM) Development Committee led by the Chief Executive, while also streamlining administrative procedures to accelerate the NM development, according to a report from HSBC Global Research. Although the policies are not surprising, the broker believes that they can solidify growth opportunities, and Hong Kong power stocks will benefit from the city's emission reduction targets and other development plans. Meanwhile, rising potential electricity demand, particularly in the NM, will require large-scale, capital-intensive infrastructure. CLP HOLDINGS (00002.HK) is expected to benefit from asset growth under the scheme of control, while HK & CHINA GAS (00003.HK) could also find opportunities. HSBC Global Research is upbeat on CLP HOLDINGS, citing its structural advantages from Hong Kong's long-term development. With strong free cash flow, it is seen capable of delivering steady dividend growth. Its target price has been set at HKD78 with a Buy rating. The broker is also positive on HKELECTRIC-SS (02638.HK), assigning a target price of HKD7.2 and a Buy rating given its solid earnings and defensive profile. As for HK & CHINA GAS, the broker has kept its Hold rating unchanged with a target price of HKD6.6, considering that its limited free cash flow will constrain shareholder returns. AAStocks Financial News |
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