CLP Holdings Limited (0002.HK) is the leading investor and operator in the energy business in Asia-Pacific. CLP invests, generates and supplies electricity in five markets across the Asia-Pacific region: Hong Kong, India, Australia, Mainland China, Southeast Asia and Taiwan. Founded 1901, CPL supplies today electricity to 80% of Hong Kong’s population. CLP is listed on HKEX since 1998. The stock can also be traded in the US and in Germany.
CLP comprised over 80 assets with 18,180 MW of electricity generating capacity and 4,526 MW of capacity purchase, and serves about 5.1 million customer accounts. The portfolio of power generation assets includes six different energy sources: coal, gas, nuclear and renewables. CLP is the largest wind developer in India and the largest external renewable investor in China.
With a staff of 7,360 and revenues of 80,700m HKD CLP generated a net profit of 15,917m HKD in 2015, an increase of 40% compared to 2014. 20% net profit margin is well above industry average. This increase is partly due to a sale of two subsidiaries in Australia, a challenging market with oversupply and a high competitive market for wholesale electricity. The increase in profits comes furthermore from lower cost of purchases of electricity, gas and distribution services in 2015.
A challenge for CLP will be the transition to a low carbon economy as signed in April by more than 170 countries at the Paris Agreement. CLP plans to boost investments in renewable power generation overseas to help fight climate change. This will affect profit margins on a short term. On the long run CLP will be well positioned when climate legislative will further be reinforced.
Most covering analyst recommends to only holding positions. From a technical perspective the stock tested several times a support level at 62 HKD in the past two years and reached now old highs from 2011 at 73 HKD. On an YTD basis the stock has advanced 10% and has well outperformed the general market. CLP’s robust balance sheet, its strong cash flow and a promising chart picture with an up trending 200 EMA give us confidence that the stock could outbreak its resistance at 73 HKD to reach price targets at around 78 HKD and more.
AIS Rating: ★★★☆☆
| 2011 | 2012 | 2013 | 2014 | 2015 | |
|---|---|---|---|---|---|
| EPS (HKD) | 3.9 | 3.5 | 2.4 | 4.4 | 6.2 |
| Change | -10% | -11% | -30% | 85% | 40% |
| P/E | P/E Industry |
P/B | P/CF | Equity Ratio |
ROE | Debt/ Capital |
Div YLD |
|---|---|---|---|---|---|---|---|
| 12 | 14 | 1.9 | 8 | 49% | 17% | 51% | 3.7% |
