HTSC·2025-08-15 06:40Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 67.13 [6][8]. Core Views - The company's 1H25 performance met expectations, with revenue of HKD 3.52 billion (down 22.5% year-on-year) and net profit of HKD 30.42 billion (up 1.2% year-on-year), aligning closely with the forecasted net profit of HKD 30.96 billion [1][4]. - The company declared an interim dividend of HKD 16.62 billion, unchanged from the previous year, representing 54.6% of net profit, with a corresponding DPS of HKD 0.78 [1][4]. - The business model demonstrates strong resilience against risks, and several assets are expected to enter a period of increased returns in 2025/26, suggesting potential profit growth in the future [1][3]. Summary by Sections Financial Performance - The UK business contributed a profit of HKD 17.24 billion in 1H25, up 11.2% year-on-year, benefiting from regulatory asset recovery and a stronger GBP [2]. - The Hong Kong business reported a profit of HKD 3.34 billion, an increase of 5.7% year-on-year, while the Australian business saw a profit contribution of HKD 6.52 billion, down 4.3% year-on-year due to contract expirations and declining market prices [2][3]. - The company anticipates that regulatory asset return rates will increase, supporting stable profit growth in the future [3]. Earnings Forecast and Valuation - The earnings forecast for 2025-2027 has been adjusted, with expected net profits of HKD 61.6 billion, HKD 65.7 billion, and HKD 68.7 billion respectively, reflecting slight changes from previous estimates [4]. - The report projects an EPS of HKD 2.89 for 2025, with a price-to-book ratio (PB) of 1.64x, and a target price of HKD 67.13, indicating a positive outlook based on the company's resilient business model and potential for profit contributions from acquisitions [4][10].