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HK Electric Investments and HK Electric Investments

SEHK:2638
Snowflake Description

Imperfect balance sheet and overvalued.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
2638
SEHK
HK$67B
Market Cap
  1. Home
  2. HK
  3. Utilities
Company description

HK Electric Investments and HK Electric Investments Limited, a vertically integrated power utility, generates, transmits, distributes, and supplies electricity in Hong Kong Island and Lamma Island. The last earnings update was 46 days ago. More info.


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2638 Share Price and Events
7 Day Returns
-0.7%
SEHK:2638
-0.4%
HK Electric Utilities
-2.5%
HK Market
1 Year Returns
3.8%
SEHK:2638
5.9%
HK Electric Utilities
-15.9%
HK Market
2638 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
HK Electric Investments and HK Electric Investments (2638) -0.7% -1.6% -5.8% 3.8% 9% 43.7%
HK Electric Utilities -0.4% 0% -2.3% 5.9% -3.4% 16.8%
HK Market -2.5% -8.6% -2.1% -15.9% 25.4% 7.8%
1 Year Return vs Industry and Market
  • 2638 underperformed the Electric Utilities industry which returned 5.9% over the past year.
  • 2638 outperformed the Market in Hong Kong which returned -15.9% over the past year.
Price Volatility
2638
Industry
5yr Volatility vs Market

2638 Value

 Is HK Electric Investments and HK Electric Investments undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of HK Electric Investments and HK Electric Investments to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for HK Electric Investments and HK Electric Investments.

SEHK:2638 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 9 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.3%
Perpetual Growth Rate 10-Year HK Government Bond Rate 2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:2638
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year HK Govt Bond Rate 2%
Equity Risk Premium S&P Global 6.7%
Electric Utilities Unlevered Beta Simply Wall St/ S&P Global 0.23
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.235 (1 + (1- 25%) (62.49%))
0.561
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2% + (0.8 * 6.65%)
7.32%

Discounted Cash Flow Calculation for SEHK:2638 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for HK Electric Investments and HK Electric Investments is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

SEHK:2638 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (HKD, Millions) Source Present Value
Discounted (@ 7.32%)
2019 1,398.50 Analyst x2 1,303.08
2020 1,487.67 Analyst x3 1,291.58
2021 2,015.00 Analyst x1 1,630.03
2022 2,039.62 Est @ 1.22% 1,537.37
2023 2,069.32 Est @ 1.46% 1,453.32
2024 2,102.84 Est @ 1.62% 1,376.10
2025 2,139.33 Est @ 1.74% 1,304.45
2026 2,178.16 Est @ 1.82% 1,237.51
2027 2,218.93 Est @ 1.87% 1,174.65
2028 2,261.34 Est @ 1.91% 1,115.42
Present value of next 10 years cash flows HK$13,423.50
SEHK:2638 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= HK$2,261.34 × (1 + 2%) ÷ (7.32% – 2%)
HK$43,357.74
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= HK$43,357.74 ÷ (1 + 7.32%)10
HK$21,386.44
SEHK:2638 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= HK$13,423.50 + HK$21,386.44
HK$34,809.94
Equity Value per Share
(HKD)
= Total value / Shares Outstanding
= HK$34,809.94 / 8,836.20
HK$3.94
SEHK:2638 Discount to Share Price
Calculation Result
Value per share (HKD) From above. HK$3.94
Current discount Discount to share price of HK$7.60
= -1 x (HK$7.60 - HK$3.94) / HK$3.94
-92.9%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of HK Electric Investments and HK Electric Investments is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for HK Electric Investments and HK Electric Investments's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are HK Electric Investments and HK Electric Investments's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
SEHK:2638 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in HKD HK$0.35
SEHK:2638 Share Price ** SEHK (2019-05-17) in HKD HK$7.6
Hong Kong Electric Utilities Industry PE Ratio Median Figure of 6 Publicly-Listed Electric Utilities Companies 15.49x
Hong Kong Market PE Ratio Median Figure of 1,476 Publicly-Listed Companies 11.17x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of HK Electric Investments and HK Electric Investments.

SEHK:2638 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= SEHK:2638 Share Price ÷ EPS (both in HKD)

= 7.6 ÷ 0.35

22.01x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • HK Electric Investments and HK Electric Investments is overvalued based on earnings compared to the HK Electric Utilities industry average.
  • HK Electric Investments and HK Electric Investments is overvalued based on earnings compared to the Hong Kong market.
Price based on expected Growth
Does HK Electric Investments and HK Electric Investments's expected growth come at a high price?
Raw Data
SEHK:2638 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 22.01x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 9 Analysts
-4.8%per year
Asia Electric Utilities Industry PEG Ratio Median Figure of 10 Publicly-Listed Electric Utilities Companies 0.8x
Hong Kong Market PEG Ratio Median Figure of 463 Publicly-Listed Companies 0.79x

*Line of best fit is calculated by linear regression .

SEHK:2638 PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 22.01x ÷ -4.8%

-4.62x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • HK Electric Investments and HK Electric Investments earnings are not expected to grow next year, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on HK Electric Investments and HK Electric Investments's assets?
Raw Data
SEHK:2638 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in HKD HK$5.52
SEHK:2638 Share Price * SEHK (2019-05-17) in HKD HK$7.6
Hong Kong Electric Utilities Industry PB Ratio Median Figure of 7 Publicly-Listed Electric Utilities Companies 1.38x
Hong Kong Market PB Ratio Median Figure of 2,155 Publicly-Listed Companies 0.97x
SEHK:2638 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= SEHK:2638 Share Price ÷ Book Value per Share (both in HKD)

= 7.6 ÷ 5.52

1.38x

* Primary Listing of HK Electric Investments and HK Electric Investments.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • HK Electric Investments and HK Electric Investments is good value based on assets compared to the HK Electric Utilities industry average.
X
Value checks
We assess HK Electric Investments and HK Electric Investments's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Electric Utilities industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Electric Utilities industry average (and greater than 0)? (1 check)
  5. HK Electric Investments and HK Electric Investments has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

2638 Future Performance

 How is HK Electric Investments and HK Electric Investments expected to perform in the next 1 to 3 years based on estimates from 9 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
-4.8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is HK Electric Investments and HK Electric Investments expected to grow at an attractive rate?
  • HK Electric Investments and HK Electric Investments's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 2%.
Growth vs Market Checks
  • HK Electric Investments and HK Electric Investments's earnings are expected to decrease over the next 1-3 years, this is below the Hong Kong market average.
  • HK Electric Investments and HK Electric Investments's revenues are expected to decrease over the next 1-3 years, this is below the Hong Kong market average.
Annual Growth Rates Comparison
Raw Data
SEHK:2638 Future Growth Rates Data Sources
Data Point Source Value (per year)
SEHK:2638 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 9 Analysts -4.8%
SEHK:2638 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 9 Analysts -0.3%
Hong Kong Electric Utilities Industry Earnings Growth Rate Market Cap Weighted Average 1%
Asia Electric Utilities Industry Revenue Growth Rate Market Cap Weighted Average 3.7%
Hong Kong Market Earnings Growth Rate Market Cap Weighted Average 11.4%
Hong Kong Market Revenue Growth Rate Market Cap Weighted Average 10.7%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
SEHK:2638 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below
All numbers in HKD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
SEHK:2638 Future Estimates Data
Date (Data in HKD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 11,542 6,769 2,661 4
2020-12-31 11,271 5,924 2,663 9
2019-12-31 10,826 6,475 2,537 7
SEHK:2638 Past Financials Data
Date (Data in HKD Millions) Revenue Cash Flow Net Income *
2018-12-31 11,612 5,015 3,051
2018-09-30 11,718 5,465 3,186
2018-06-30 11,824 5,915 3,320
2018-03-31 11,759 5,901 3,331
2017-12-31 11,693 5,887 3,341
2017-09-30 11,557 6,386 3,421
2017-06-30 11,420 6,885 3,501
2017-03-31 11,420 7,452 3,550
2016-12-31 11,420 8,018 3,599
2016-09-30 11,362 8,125 3,543
2016-06-30 11,304 8,232 3,487
2016-03-31 11,257 8,148 3,539

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • HK Electric Investments and HK Electric Investments's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
  • HK Electric Investments and HK Electric Investments's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
SEHK:2638 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below

All data from HK Electric Investments and HK Electric Investments Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:2638 Future Estimates Data
Date (Data in HKD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 0.29 0.30 0.28 4.00
2020-12-31 0.30 0.33 0.28 8.00
2019-12-31 0.29 0.31 0.27 8.00
SEHK:2638 Past Financials Data
Date (Data in HKD Millions) EPS *
2018-12-31 0.35
2018-09-30 0.36
2018-06-30 0.38
2018-03-31 0.38
2017-12-31 0.38
2017-09-30 0.39
2017-06-30 0.40
2017-03-31 0.40
2016-12-31 0.41
2016-09-30 0.40
2016-06-30 0.39
2016-03-31 0.40

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • HK Electric Investments and HK Electric Investments is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess HK Electric Investments and HK Electric Investments's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Asia market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
HK Electric Investments and HK Electric Investments has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

2638 Past Performance

  How has HK Electric Investments and HK Electric Investments performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare HK Electric Investments and HK Electric Investments's growth in the last year to its industry (Electric Utilities).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • HK Electric Investments and HK Electric Investments's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • HK Electric Investments and HK Electric Investments's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • HK Electric Investments and HK Electric Investments's 1-year earnings growth is negative, it can't be compared to the HK Electric Utilities industry average.
Earnings and Revenue History
HK Electric Investments and HK Electric Investments's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from HK Electric Investments and HK Electric Investments Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:2638 Past Revenue, Cash Flow and Net Income Data
Date (Data in HKD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 11,612.00 3,051.00
2018-09-30 11,718.00 3,185.50
2018-06-30 11,824.00 3,320.00
2018-03-31 11,758.50 3,330.50
2017-12-31 11,693.00 3,341.00
2017-09-30 11,556.50 3,421.00
2017-06-30 11,420.00 3,501.00
2017-03-31 11,420.00 3,550.00
2016-12-31 11,420.00 3,599.00
2016-09-30 11,362.00 3,543.00
2016-06-30 11,304.00 3,487.00
2016-03-31 11,257.00 3,539.00
2015-12-31 11,210.00 3,591.00
2015-09-30 11,232.50 3,515.00
2015-06-30 11,255.00 3,439.00
2015-03-31 10,879.50 3,320.00
2014-12-31 10,504.00 3,201.00
2013-12-31 10,209.00 5,180.00
2013-09-30 10,223.62 4,668.85 372.80
2012-12-31 10,400.00 4,542.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • HK Electric Investments and HK Electric Investments has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • HK Electric Investments and HK Electric Investments used its assets less efficiently than the HK Electric Utilities industry average last year based on Return on Assets.
  • HK Electric Investments and HK Electric Investments's use of capital has not improved over the past 3 years (Return on Capital Employed).
X
Past performance checks
We assess HK Electric Investments and HK Electric Investments's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Electric Utilities industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
HK Electric Investments and HK Electric Investments has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

2638 Health

 How is HK Electric Investments and HK Electric Investments's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up HK Electric Investments and HK Electric Investments's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • HK Electric Investments and HK Electric Investments's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • HK Electric Investments and HK Electric Investments's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of HK Electric Investments and HK Electric Investments's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from HK Electric Investments and HK Electric Investments Company Filings, last reported 4 months ago.

SEHK:2638 Past Debt and Equity Data
Date (Data in HKD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 48,743.00 41,965.00 95.00
2018-09-30 48,743.00 41,965.00 95.00
2018-06-30 49,228.00 41,525.00 764.00
2018-03-31 49,228.00 41,525.00 764.00
2017-12-31 49,722.00 41,371.00 1,715.00
2017-09-30 49,722.00 41,371.00 1,715.00
2017-06-30 48,370.00 40,395.00 389.00
2017-03-31 48,370.00 40,395.00 389.00
2016-12-31 49,905.00 39,679.00 379.00
2016-09-30 49,905.00 39,679.00 379.00
2016-06-30 48,297.00 40,960.00 334.00
2016-03-31 48,297.00 40,960.00 334.00
2015-12-31 49,012.00 47,217.00 6,174.00
2015-09-30 49,012.00 47,217.00 6,174.00
2015-06-30 48,504.00 47,373.00 4,704.00
2015-03-31 48,504.00 47,373.00 4,704.00
2014-12-31 49,191.00 47,869.00 4,642.00
2013-12-31 12,271.00 30,077.00 1,060.00
2013-09-30 14,026.37 27,082.47 37.07
2012-12-31 14,488.00 27,210.00 8.00
  • HK Electric Investments and HK Electric Investments's level of debt (86.1%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (243.5% vs 86.1% today).
  • Debt is not well covered by operating cash flow (12%, less than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 5.3x coverage).
X
Financial health checks
We assess HK Electric Investments and HK Electric Investments's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. HK Electric Investments and HK Electric Investments has a total score of 2/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

2638 Dividends

 What is HK Electric Investments and HK Electric Investments's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
5.27%
Current annual income from HK Electric Investments and HK Electric Investments dividends. Estimated to be 4.13% next year.
If you bought HK$2,000 of HK Electric Investments and HK Electric Investments shares you are expected to receive HK$105 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • HK Electric Investments and HK Electric Investments's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.07%).
  • HK Electric Investments and HK Electric Investments's dividend is below the markets top 25% of dividend payers in Hong Kong (5.72%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
SEHK:2638 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 9 Analyst Estimates (S&P Global) See Below
Hong Kong Electric Utilities Industry Average Dividend Yield Market Cap Weighted Average of 6 Stocks 4.1%
Hong Kong Market Average Dividend Yield Market Cap Weighted Average of 968 Stocks 3.6%
Hong Kong Minimum Threshold Dividend Yield 10th Percentile 1.2%
Hong Kong Bottom 25% Dividend Yield 25th Percentile 2.1%
Hong Kong Top 25% Dividend Yield 75th Percentile 5.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:2638 Future Dividends Estimate Data
Date (Data in HK$) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 0.31 5.00
2020-12-31 0.32 10.00
2019-12-31 0.31 7.00
SEHK:2638 Past Annualized Dividends Data
Date (Data in HK$) Dividend per share (annual) Avg. Yield (%)
2019-04-03 0.400 5.200
2019-03-19 0.400 5.066
2018-04-03 0.400 5.173
2018-03-13 0.400 5.301
2017-03-31 0.400 5.594
2017-03-21 0.400 5.686
2016-04-07 0.402 5.715
2016-03-15 0.402 5.880
2015-08-04 0.398 6.747
2015-07-14 0.398 7.385
2015-03-30 0.398 7.547
2014-08-05 0.331 6.378
2014-07-21 0.331 6.181
2014-04-10 0.000 0.000

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Whilst dividend payments have been stable, HK Electric Investments and HK Electric Investments has been paying a dividend for less than 10 years.
  • Dividend payments have increased, but HK Electric Investments and HK Electric Investments only paid a dividend in the past 5 years.
Current Payout to shareholders
What portion of HK Electric Investments and HK Electric Investments's earnings are paid to the shareholders as a dividend.
  • Dividends paid are not well covered by earnings (0.9x coverage).
Future Payout to shareholders
  • Dividends after 3 years are not well covered by earnings (0.9x coverage).
X
Income/ dividend checks
We assess HK Electric Investments and HK Electric Investments's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.2%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can HK Electric Investments and HK Electric Investments afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. HK Electric Investments and HK Electric Investments has a total score of 1/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

2638 Management

 What is the CEO of HK Electric Investments and HK Electric Investments's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Chi Tin Wan
COMPENSATION HK$16,400,000
AGE 68
TENURE AS CEO 5.4 years
CEO Bio

Mr. Chi Tin Wan has been the Chief Executive Officer of HK Electric Investments and HK Electric Investments Limited since December 5, 2013 and Executive Director since September 23, 2013. Mr. Wan serves as the Chief Executive Officer and Executive Director at The Hongkong Electric Company, Limited and has been its Managing Director since January 2013. He serves as Chief Executive Officer of HK Electric Investments Limited and has been its Executive Director since September 23, 2013. He has been an Executive Director of Power Assets Holdings Limited since December 12, 2005. He served as Group Managing Director of Power Assets Holdings Limited from January 2013 to January 29, 2014 and served as its Director of Engineering, Planning & Development since March 2008. He served as General Manager of Corporate Development, Information Technology Services & Projects Division at Power Assets Holdings Limited since July 2003. Mr. Wan has been with the Hongkong Electric Group since 1978, holding positions of Chief Electrical Engineer of HEC and Deputy General Manager of Associated Technical Services Limited, a wholly owned subsidiary of the Power Assets Holdings Limited. He served as the Chief Executive Officer of Powercor Australia Limited from September 2000 to June 2003 and CitiPower Pty. from August 2002 to June 2003. He has been a Director of South Eastern Power Networks Plc since February 8, 2013. He has been Director of UK Power Networks Holdings Limited since February 8, 2013. He serves as Director of SA Power Networks, Powercor Network Services Pty Ltd. and ETSA Utilities Finance Pty Ltd. He serves as a Non-Executive Director at Victoria Power Networks (Finance) Pty Limited. He serves as a Director of Eastern Power Networks plc and London Power Networks plc. He is the Vice Chairman of the Engineers Registration Board of the Hong Kong and a Member of Audit Committee of The University of Hong Kong. Mr. Wan holds a Bachelor of Science degree in Electrical Engineering from University of Hong Kong in November 1973 and is also a Chartered Engineer. He is an Honorary Fellow of the Energy Institute, a Fellow of the Institution of Engineering and Technology and a Fellow of the Hong Kong Institution of Engineers.

CEO Compensation
  • Chi Tin's compensation has been consistent with company performance over the past year.
  • Chi Tin's remuneration is higher than average for companies of similar size in Hong Kong.
Management Team Tenure

Average tenure and age of the HK Electric Investments and HK Electric Investments management team in years:

9.6
Average Tenure
56
Average Age
  • The average tenure for the HK Electric Investments and HK Electric Investments management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Canning Fok

TITLE
Executive Chairman
COMPENSATION
HK$720K
AGE
67

Chi Tin Wan

TITLE
CEO & Executive Director
COMPENSATION
HK$16M
AGE
68
TENURE
5.4 yrs

Francis Cheng

TITLE
Executive Director & Operations Director
COMPENSATION
HK$5M
AGE
61

Dominic Chan

TITLE
Executive Director
COMPENSATION
HK$3M
AGE
55

Kim Man Wong

TITLE
Chief Financial Officer
AGE
57
TENURE
8.7 yrs

Alex Ng

TITLE
Group Legal Counsel & Company Secretary
AGE
49
TENURE
10.5 yrs

Mimi Yeung

TITLE
General Manager of Public Affairs
AGE
54
TENURE
15.8 yrs

Tak Chow Yee

TITLE
General Manager of Corporate Development
AGE
63
TENURE
42.8 yrs

Dennis Kwong

TITLE
General Manager of Human Resources
AGE
53
TENURE
4.9 yrs

Daobiao Chen

TITLE
Executive Director
AGE
50
Board of Directors Tenure

Average tenure and age of the HK Electric Investments and HK Electric Investments board of directors in years:

5.4
Average Tenure
64
Average Age
  • The tenure for the HK Electric Investments and HK Electric Investments board of directors is about average.
Board of Directors

Canning Fok

TITLE
Executive Chairman
COMPENSATION
HK$720K
AGE
67
TENURE
5.4 yrs

Chi Tin Wan

TITLE
CEO & Executive Director
COMPENSATION
HK$16M
AGE
68
TENURE
5.7 yrs

Victor Li

TITLE
Deputy Chairman
COMPENSATION
HK$320K
AGE
54
TENURE
4.5 yrs

Francis Cheng

TITLE
Executive Director & Operations Director
COMPENSATION
HK$5M
AGE
61
TENURE
5.4 yrs

Dominic Chan

TITLE
Executive Director
COMPENSATION
HK$3M
AGE
55
TENURE
6.9 yrs

Daobiao Chen

TITLE
Executive Director
AGE
50
TENURE
1 yrs

Donald Jeffrey Roberts

TITLE
Independent Non-Executive Director
COMPENSATION
HK$170K
AGE
66
TENURE
5.4 yrs

Ronald Joseph Arculli

TITLE
Non Executive Director
COMPENSATION
HK$180K
AGE
79
TENURE
5.4 yrs

Alex Fong

TITLE
Independent Non Executive Director
COMPENSATION
HK$110K
AGE
62
TENURE
5.4 yrs

Francis Lee

TITLE
Independent Non-Executive Director
COMPENSATION
HK$160K
AGE
77
TENURE
5.4 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (HK$) Value (HK$)
X
Management checks
We assess HK Electric Investments and HK Electric Investments's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. HK Electric Investments and HK Electric Investments has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

2638 News

Simply Wall St News

Can HK Electric Investments and HK Electric Investments Limited (HKG:2638) Improve Its Returns?

We'll use ROE to examine HK Electric Investments and HK Electric Investments Limited (HKG:2638), by way of a worked example. … HK Electric Investments and HK Electric Investments has a ROE of 6.3%, based on the last twelve months. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

What Do Investors Need To Know About HK Electric Investments and HK Electric Investments Limited's (HKG:2638) Long Term Outlook?

The latest earnings update HK Electric Investments and HK Electric Investments Limited (HKG:2638) released in December 2018a

Simply Wall St -

Here's What HK Electric Investments and HK Electric Investments Limited's (HKG:2638) P/E Is Telling Us

We'll look at HK Electric Investments and HK Electric Investments Limited's (HKG:2638) P/E ratio and reflect on what it tells us about the company's share price. … Based on the last twelve months, HK Electric Investments and HK Electric Investments's P/E ratio is 23.34. … How Do I Calculate HK Electric Investments and HK Electric Investments's Price To Earnings Ratio

Simply Wall St -

What Should You Know About HK Electric Investments and HK Electric Investments Limited's (HKG:2638) Growth?

After HK Electric Investments and HK Electric Investments Limited's (HKG:2638) earnings announcement on 31 December 2018, … as a -17% fall in profits is expected in the upcoming year.

Simply Wall St -

Should You Worry About HK Electric Investments and HK Electric Investments Limited's (HKG:2638) CEO Pay?

Chi Wan has been the CEO of HK Electric Investments and HK Electric Investments Limited (HKG:2638) since 2013. … This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … Our data indicates that HK Electric Investments and HK Electric Investments Limited is worth HK$72b, and total annual CEO compensation is HK$16m.

Simply Wall St -

Are HK Electric Investments and HK Electric Investments Limited's (HKG:2638) Interest Costs Too High?

Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as HK Electric Investments and HK Electric Investments Limited (HKG:2638), with a market cap of HK$71b, often get neglected by retail investors. … However, history shows that overlooked mid-cap companies have performed better on a risk-adjusted manner than the smaller and larger segment of the market. … View our latest analysis for HK Electric Investments and HK Electric Investments

Simply Wall St -

Should HK Electric Investments and HK Electric Investments Limited (HKG:2638) Focus On Improving This Fundamental Metric?

We'll use ROE to examine HK Electric Investments and HK Electric Investments Limited (HKG:2638), by way of a worked example. … Over the last twelve months HK Electric Investments and HK Electric Investments has recorded a ROE of 6.7%. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Is HK Electric Investments and HK Electric Investments Limited (HKG:2638) A Good Dividend Stock?

Historically, HK Electric Investments and HK Electric Investments Limited (HKG:2638) has paid dividends to shareholders, and these days it yields 4.9%. … Does HK Electric Investments and HK Electric Investments tick all the boxes of a great dividend stock? … See our latest analysis for HK Electric Investments and HK Electric Investments?

Simply Wall St -

What Should You Know About HK Electric Investments and HK Electric Investments Limited's (HKG:2638) Capital Returns?

To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. … Understanding Return On Capital Employed (ROCE). … The formula for calculating the return on capital employed is:

Simply Wall St -

Should You Be Pleased About The CEO Pay At HK Electric Investments and HK Electric Investments Limited's (HKG:2638)

First, this article will compare CEO compensation with compensation at similar sized companies. … How Does Chi Wan's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that HK Electric Investments and HK Electric Investments Limited has a market cap of HK$67b, and is paying total annual CEO compensation of HK$16m

Simply Wall St -

2638 Company Info

Description

HK Electric Investments and HK Electric Investments Limited, a vertically integrated power utility, generates, transmits, distributes, and supplies electricity in Hong Kong Island and Lamma Island. As of December 31, 2018, the company operated 6 coal-fired units, 2 gas-fired units, 5 oil-fired gas turbine units, 1 wind turbine, and 1 solar power system with an installed capacity of 3,237 MW. It also operates a transmission and distribution network of 6,457 kilometers of underground and submarine cables; and 3,963 substations, as well as served 579,000 residential, commercial, and industrial customers. The company was founded in 1889 and is headquartered in Hong Kong, Hong Kong.

Details
Name: HK Electric Investments and HK Electric Investments Limited
2638
Exchange: SEHK
Founded: 1889
HK$67,155,120,000
8,836,200,000
Website: http://www.hkelectric.com
Address: HK Electric Investments and HK Electric Investments Limited
Hongkong Electric Centre,
44 Kennedy Road,
Hong Kong,
Hong Kong
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
SEHK 2638 Stapled Securities The Stock Exchange of Hong Kong Ltd. HK HKD 29. Jan 2014
OTCPK HKCV.F Stapled Securities Pink Sheets LLC US USD 29. Jan 2014
DB HKT Stapled Securities Deutsche Boerse AG DE EUR 29. Jan 2014
Number of employees
Current staff
Staff numbers
1,763
HK Electric Investments and HK Electric Investments employees.
Industry
Electric Utilities
Utilities
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/19 13:06
End of day share price update: 2019/05/17 00:00
Last estimates confirmation: 2019/05/12
Last earnings filing: 2019/04/03
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.