The Zhitong Finance App learned that Citi released a research report stating that it reaffirmed the Hong Kong Density-SS (02638) “buy” rating and raised HK Electric's earnings test by 0.7% next year in consideration of the expansion of the asset base. Under the control agreement, the annual dividend rate from 2024 to 2028 is expected to continue to reach at least 6.7%, and the target price will increase by 0.9% to HK$5.45 from HK$5.4.
According to the report, under good cost control, net profit attributable to the company's joint stock holders rose 6.8% year-on-year to 3.156 billion yuan last year, 4.6% higher than market expectations. A second interim dividend of 16.09 cents was paid to replace the final dividend. The bank anticipates that the US will cut interest rates starting in the second half of this year, and the company is expected to receive critical valuations; since 75% of the Group's debt is fixed rate debt, Hong Kong Electric's interest rate risk is low.