Financial Performance - Revenue for the first half of 2025 was HKD 5.567 billion, slightly down from HKD 5.572 billion in 2024[4] - The unaudited profit attributable to unit holders was HKD 1.01 billion, an increase from HKD 947 million in 2024, representing a growth of approximately 6.5%[13] - The group’s EBITDA for the first half of 2025 was HKD 3.979 billion, compared to HKD 3.989 billion in 2024, indicating a slight decrease[13] - Net profit for the same period was HKD 1.001 billion, an increase from HKD 0.947 billion in 2024, representing a growth of approximately 5.7%[24] - The total distributable income for the period was HKD 1.48 billion, consistent with the previous year[14] - Operating profit for the period was HKD 2,344 million, down from HKD 2,490 million in 2024, representing a decrease of 5.9%[37] - Total comprehensive income attributable to shareholders for the same period was HKD 646 million, down 33.6% from HKD 974 million in 2024[39] - The pre-tax profit for the six months ended June 30, 2025, was HKD 1,666 million, down from HKD 1,816 million in the same period of 2024[66] Distribution and Dividends - The interim distribution declared was HKD 1.408 billion, with an interim distribution per unit of HKD 0.1594, unchanged from 2024[14] - The total distribution amount for the period was HKD 1,408 million, unchanged from the previous year, maintaining a consistent distribution policy[26] - The company paid dividends totaling HKD 1,422 million during the period, consistent with the previous year[46] - The interim distribution for the year 2025 is set at HKD 0.1594 per unit, payable on September 8, 2025[128] Capital Expenditure and Investment - The capital investment plan for 2024-2028 is valued at HKD 22 billion, aimed at supporting Hong Kong's zero-carbon transition[12] - Total capital expenditure for the period was HKD 1.482 billion, up from HKD 1.375 billion in 2024, indicating an increase of 7.8%[28] - The company has approved and contracted capital expenditures for property, plant, and equipment amounting to 8,701 million as of June 30, 2025, up from 7,437 million at the end of 2024, representing an increase of approximately 17%[78] - The company has approved but not yet contracted capital expenditures for property, plant, and equipment totaling 15,175 million as of June 30, 2025, down from 17,967 million at the end of 2024, indicating a decrease of about 15.6%[78] Operational Efficiency and Reliability - The group achieved a reliability rate of over 99.9999%, with an average of less than half a minute of unplanned outages per customer annually[12] - The company is actively enhancing its power system reliability through emergency recovery drills and the establishment of new substations in the Eastern and Southern districts[17] - The smart meter installation project aims to cover 600,000 customers, with over 90% already completed and expected to finish by the end of 2025[15] - The company is actively implementing major projects, including the construction of a new gas combined cycle generator unit[12] Market and Sales Performance - Electricity sales volume in the first half of 2025 decreased by 3.2% compared to the same period in 2024, attributed to milder weather and successful energy-saving initiatives[16] - The basic electricity tariff was raised by 3.4 HKD cents to HKD 1.229 per kWh due to increased capital investment and operating costs[16] - The fuel adjustment fee decreased by over 16% in August 2025 compared to January 2025, leading to a net electricity tariff reduction of 4.4% to HKD 1.596 per kWh[16] - For the six months ended June 30, 2025, the group's revenue from electricity sales was HKD 5,537 million, a slight decrease of 0.4% from HKD 5,558 million in 2024[54] Financial Position and Debt - The net debt of the trust group as of June 30, 2025, was HKD 513.41 billion, compared to HKD 508.25 billion on December 31, 2024, reflecting a slight increase of 1.4%[31] - The trust group maintained a net debt to total equity ratio of 51% as of June 30, 2025, consistent with the ratio on December 31, 2024[31] - Total borrowings increased to HKD 24,196 million as of June 30, 2025, compared to HKD 23,738 million at the end of 2024, indicating a rise in leverage[68] - The total outstanding financial derivative contracts amounted to HKD 544.91 billion as of June 30, 2025, an increase from HKD 495.58 billion on December 31, 2024[33] Corporate Governance - The company has adhered to the corporate governance code applicable to the trust and the company for the six months ended June 30, 2025, except as noted[102] - The audit committee has reviewed the unaudited consolidated financial statements of the trust and the unaudited financial statements of the trustee-manager for the six months ended June 30, 2025[109] - The company is committed to maintaining high standards of corporate governance to attract investment and protect stakeholders' interests[102] - The board consists of 17 directors, including 5 executive directors, 6 non-executive directors, and 6 independent non-executive directors, complying with the requirement that independent non-executive directors represent at least one-third of the total number of directors[104] Future Outlook and Strategic Initiatives - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 10% to 12%[133] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[132] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[133] - Market expansion plans include entering two new international markets by the end of the year, which could increase market share by 5%[131]

Key Points - As of August 22, 108 stocks reached their 52-week highs, with Yicheng Group (08365), Shanghai Xiaonan Guo (03666), and Cybernaut International Holdings (01020) leading the high rate at 32.77%, 31.11%, and 20.16% respectively [1] - The closing prices for the top three stocks were 1.580, 0.051, and 0.155 respectively, indicating significant upward movement in their stock prices [1] - Other notable stocks that reached new highs include VALA (02051) at 18.87% and CTR Holdings (01416) at 16.52% [1] 52-Week High Rankings - The top three stocks with the highest increase rates were Yicheng Group (08365) at 32.77%, Shanghai Xiaonan Guo (03666) at 31.11%, and Cybernaut International Holdings (01020) at 20.16% [1] - The closing prices for these stocks were significantly higher than their previous values, indicating strong market performance [1] - The overall trend shows a positive sentiment in the market with many stocks achieving new highs [1] Additional Stocks Reaching New Highs - VALA (02051) reached a high of 0.630, marking an 18.87% increase, while CTR Holdings (01416) closed at 0.134, a 16.52% increase [1] - Other stocks such as Huaxing Capital Holdings (01911) and Huahong Semiconductor (01347) also showed positive performance with increases of 9.11% and 8.85% respectively [1]

Core Viewpoint - Hong Kong Electric (港灯) reported a stable performance in its first half of 2025, with revenue slightly declining and net profit increasing, indicating resilience in its operations despite external challenges [1][2]. Financial Performance - For 1H25, the company achieved revenue of HKD 55.67 billion, a year-on-year decrease of 0.09%, while net profit attributable to shareholders was HKD 10.01 billion, reflecting a year-on-year increase of 5.70%, aligning closely with previous forecasts [1]. - The company declared an interim dividend of HKD 14.08 billion, maintaining the same level as the previous year, which corresponds to a dividend per share (DPS) of HKD 0.1594, also unchanged year-on-year [1]. Capital Expenditure and Future Outlook - Capital expenditure for 1H25 rose by 8% to HKD 14.82 billion, with a projected total capital expenditure of HKD 22 billion from 2024 to 2028, indicating a significant increase in future spending [3]. - The average annual capital expenditure for 2025-2028 is estimated at HKD 45.85 billion, representing a 25% increase compared to 2024 [3]. - The company is expected to benefit from its capital investments, with net profit anticipated to grow steadily due to the regulatory framework allowing for an 8% return on fixed assets [3]. Operational Efficiency and Development Plans - The company experienced a 3.2% decline in electricity sales volume in 1H25, attributed to weather conditions and the leap year in 2024 [2]. - Operational reliability remains high, with supply reliability exceeding 99.9999%, and over 90% of users covered by smart meter installations, expected to be completed by the end of 2025 [2]. - The development plan for 2024-2028 is progressing well, with the construction of a gas combined cycle generator and emergency oil-fired generators on schedule for completion between 2027 and 2029 [2]. Profit Forecast and Valuation - The company maintains its profit forecast, expecting net profits of HKD 33.4 billion, HKD 34.2 billion, and HKD 34.6 billion for 2025-2027, respectively [3]. - The target price has been adjusted to HKD 7.32, based on a price-to-book ratio (PB) of 1.30x for 2025, reflecting an increase from the previous valuation [3].

Investment Rating - The investment rating for the company is maintained as "Buy" [1][10]. Core Views - The company reported a revenue of HKD 5.567 billion for 1H25, a year-on-year decrease of 0.09%, while the net profit attributable to the parent company was HKD 1.001 billion, reflecting a year-on-year increase of 5.70%, aligning closely with previous forecasts [7]. - The company declared an interim dividend of HKD 1.408 billion, unchanged from the previous year, representing 100% of the distributable income [7]. - Capital expenditure for 1H25 increased by 8% to HKD 1.482 billion, with a projected average annual capital expenditure of HKD 4.585 billion from 2025 to 2028, indicating a 25% increase compared to 2024 [9][10]. Financial Performance Summary - **Revenue Forecasts**: Expected revenues for the upcoming years are projected as follows: HKD 12.057 billion in 2024, HKD 12.338 billion in 2025, HKD 12.838 billion in 2026, and HKD 12.983 billion in 2027, with growth rates of 5.71%, 2.33%, 4.05%, and 1.13% respectively [6]. - **Net Profit Forecasts**: The net profit attributable to the parent company is forecasted to be HKD 3.111 billion in 2024, HKD 3.342 billion in 2025, HKD 3.420 billion in 2026, and HKD 3.459 billion in 2027, with year-on-year changes of -1.43%, 7.41%, 2.34%, and 1.14% respectively [6]. - **Earnings Per Share (EPS)**: The expected EPS is projected to be HKD 0.35 in 2024, HKD 0.38 in 2025, and HKD 0.39 in both 2026 and 2027 [6]. Capital Expenditure and Development Plans - The company is progressing well with its five-year development plan, including the construction of a gas combined cycle power generation unit with a capacity of 380MW, expected to be operational by 2029 [8]. - The capital expenditure budget for 2024-2028 is estimated to reach HKD 22 billion, with a focus on maintaining high levels of capital investment to support future net profit growth [9][10]. Valuation Metrics - The target price for the company is set at HKD 7.32, based on a price-to-book ratio of 1.30x for 2025E [10]. - The company’s market capitalization is approximately HKD 55.05 billion, with a closing price of HKD 6.23 as of August 13 [3][4].

Group 1 - The core viewpoint of the report indicates that despite a 3.2% decline in electricity sales volume for Hongkong Electric (港灯-SS, 02638) in the first half of the year, the attributable profit increased by 5.7% [1] - The company maintained a distribution of 15.94 cents per unit for the first half of the year, reflecting its stable financial position [1] - DBS has adjusted its earnings forecast for Hongkong Electric and raised the target price from HKD 6.5 to HKD 7.4, while increasing the target price-to-earnings ratio from 17x to 20x to reflect improved investor sentiment [1] Group 2 - Hongkong Electric has a generation capacity of 3,617 MW and is a major electricity supplier for Hong Kong Island and Lamma Island, regulated by the Hong Kong government under the Scheme of Control Agreement (SCA) [1] - The company is investing in decarbonization initiatives and aims to phase out all coal-fired power plants by 2035, with over 50% of its electricity coming from natural gas in 2024 [1] - A liquefied natural gas terminal is under construction to facilitate the transition to gas-fired generation, which is expected to increase the proportion of natural gas generation to 70% [1] Group 3 - The report notes that global fuel price weakness will reduce net electricity fees in 2025, but Hongkong Electric enjoys stable cash flow due to its provision of highly reliable electricity supply services in a mature market [2] - The company's balance sheet remains robust, with a debt-to-capital ratio of 51.4% in the first half of 2025, stable compared to 51.1% in the first half of 2024 [2] - Approximately 73% of the company's debt structure is fixed-rate, minimizing interest rate risk, and long-term debt (over five years) accounts for 38% of total debt [2]

Group 1 - The core viewpoint of the report is that despite a 3.2% decline in electricity sales volume for Hongkong Electric (港灯-SS), the attributable profit increased by 5.7% in the first half of the year [1] - The company maintained a distribution of 15.94 cents per unit for the first half of the year, reflecting its stable financial position [1] - DBS has adjusted its earnings forecast for Hongkong Electric and raised the target price from HKD 6.5 to HKD 7.4, with a revised target price-to-earnings ratio from 17 times to 20 times, indicating improved investor sentiment [1] Group 2 - Hongkong Electric has a generation capacity of 3,617 megawatts and is a major electricity supplier for Hong Kong Island and Lamma Island, regulated by the Hong Kong government under the Scheme of Control Agreement (SCA) [1] - The company is investing in decarbonization plans and aims to phase out all coal-fired power plants by 2035, with over 50% of its electricity coming from natural gas in 2024 [1] - A liquefied natural gas terminal is under construction to facilitate the transition to gas-fired power generation, which is expected to increase the proportion of natural gas generation to 70% [1] Group 3 - The global weakness in fuel prices is expected to lower net electricity fees in 2025, but Hongkong Electric will continue to enjoy stable cash flow due to its reliable electricity supply services in a mature market [2] - The company's balance sheet remains robust, with a debt-to-capital ratio stable at 51.4% in the first half of 2025, compared to 51.1% in the first half of 2024 [2] - Approximately 73% of the company's debt structure is fixed-rate, minimizing interest rate risk, and the long-term debt (over five years) accounts for 38% of total debt [2]

Major Events - Kangji Medical (09997) received a privatization offer at a premium of approximately 9.9% [1] - China Resources Pharmaceutical (03320) plans to participate in the establishment of a fund [1] - Ganfeng Lithium (01772) intends to jointly integrate a joint venture with LAR to develop the Pozuelos-Pastos Grandes salt lake basin in Argentina [1] - China Antibody-B (03681) signed a comprehensive strategic cooperation agreement with the Hong Kong Advanced Institute of Research at Sun Yat-sen University [1] - Mingyuan Cloud (00909) plans to acquire 100% equity of ASIOT Corporation for 700 million yen [1] - Weilu Group (01196) experienced unusual stock price and trading volume changes and is in preliminary discussions with an independent third party regarding a potential acquisition of mobile game rights [1] Operating Performance - China Unicom (00762) reported revenue exceeding 200 billion yuan in the first half of the year, with a profit attributable to equity holders of 14.484 billion yuan, a year-on-year increase of 5.01% [1] - China Unicom (00762) had approximately 1.208 billion cumulative "Ubiquitous Intelligent Connection" users in the second quarter [1] - Tencent Music (01698) achieved double growth in revenue and profit in the first half of the year, with a profit attributable to equity holders of 6.7 billion yuan, a year-on-year increase of 115.85% [1] - Galaxy Entertainment (00027) reported a mid-term profit attributable to shareholders of 5.24 billion HKD, a year-on-year increase of 19.44% [1] - WH Group (00288) reported a mid-term profit attributable to shareholders of 788 million USD, a year-on-year increase of 0.51%, with an interim dividend of 0.2 HKD per share [1] - Minmetals Resources (01208) reported a mid-term profit attributable to equity holders of 340 million USD, a year-on-year increase of 1511% [1] - China Literature Group (00772) reported a mid-term profit attributable to shareholders of 850 million yuan, a year-on-year increase of 68.5% [1] - Hong Kong Electric (02638) reported a mid-term profit attributable to unit holders of 1.001 billion HKD, a year-on-year increase of 5.7% [1] - 361 Degrees (01361) reported a mid-term profit attributable to equity holders of 858 million yuan, a year-on-year increase of 8.6% [1] - Eagle Precision (01286) reported a mid-term profit attributable to equity holders of 346 million HKD, a year-on-year increase of 13.7% [1] - China Everbright Water (01857) reported a mid-term profit attributable to equity holders of 564 million HKD, a year-on-year decrease of 2.99% [1] - FIT HON TENG (06088) reported a mid-term profit attributable to shareholders of 31.511 million USD, a year-on-year decrease of 3.11% [1] - China Lilang (01234) reported a mid-term profit attributable to equity holders of 243 million yuan, a year-on-year decrease of 13.4% [1] - Fudan Zhangjiang (01349) reported a mid-term profit attributable to shareholders of 5.715 million yuan, a year-on-year decrease of 91.89% [1] - Wharf Holdings (00004) reported a mid-term profit attributable to shareholders of 535 million HKD, returning to profitability [1] - China Resources Land (01109) reported a cumulative contract sales amount of approximately 123.6 billion yuan for the first seven months, a year-on-year decrease of 11.8% [1]

Core Viewpoint - 港灯 (2638.HK) reported a net profit attributable to unit holders of HKD 1.001 billion for the six months ending June 30, reflecting a year-on-year increase of 5.7% [1] Financial Performance - Earnings per share stood at HKD 0.1133, with an interim distribution maintained at HKD 0.1594 per unit [1] - Revenue for the period was HKD 5.567 billion, showing a slight decline of 0.09% year-on-year [1] - Electricity sales volume decreased by 3.2% compared to the previous year, attributed to several factors including milder weather, successful energy-saving initiatives, a downturn in the food and retail sectors, and one less day in the reporting period compared to the leap year last year [1]

Group 1 - The company, Hong Kong Electric Holdings Limited (港灯-SS), announced a mid-term dividend of HKD 0.1594 per share for the six months ending June 30, 2025, to be distributed on September 8, 2025 [1]

Group 1 - The company, Hong Kong Electric Holdings Limited (港灯-SS), announced a mid-term dividend of HKD 0.1594 per share, which will be distributed on September 8, 2025, for the six months ending June 30, 2025 [1]