UBS released a research report stating that the target price for Yangtze River Infrastructure (01038) was raised from HK$51 to HK$73, and the target price for the Electric Energy Industry (00006) was also raised from HK$52 to HK$70. Both confirmed the “buy” rating.
According to the report, the overseas business of the Yangtze River Infrastructure and Electric Energy Industry will usher in an upward cycle in the next 5 years, indicating that the relevant predictions are based on utility infrastructure upgrades under climate change, and that utility companies will push regulators to increase returns under weak financial conditions.
The bank believes that the UK and Australia's decision on a new regulatory period in mid-2024 will be a catalyst for the two companies to welcome an upward cycle. Earnings per share from 2023 to 2028 are expected to accelerate the compound annual growth rate to 8%, and a dividend yield of 6% is expected, and Yangtze River Infrastructure is preferred.