SEHK:2638

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HK Electric Investments and HK Electric Investments

Executive Summary

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. More Details


Snowflake Analysis

Imperfect balance sheet with concerning outlook.


Similar Companies

Share Price & News

How has HK Electric Investments and HK Electric Investments's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2638 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.6%

2638

-1.9%

HK Electric Utilities

-2.8%

HK Market


1 Year Return

1.3%

2638

-20.9%

HK Electric Utilities

-1.7%

HK Market

Return vs Industry: 2638 exceeded the Hong Kong Electric Utilities industry which returned -20.2% over the past year.

Return vs Market: 2638 matched the Hong Kong Market which returned 0.5% over the past year.


Shareholder returns

2638IndustryMarket
7 Day-0.6%-1.9%-2.8%
30 Day-1.4%-0.8%2.7%
90 Day-1.6%-5.1%-0.4%
1 Year5.6%1.3%-17.0%-20.9%2.3%-1.7%
3 Year26.0%9.7%-14.1%-26.2%-8.7%-18.6%
5 Year75.2%36.5%-0.1%-23.8%13.7%-5.4%

Price Volatility Vs. Market

How volatile is HK Electric Investments and HK Electric Investments's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is HK Electric Investments and HK Electric Investments undervalued compared to its fair value and its price relative to the market?

28.7x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 2638 (HK$7.89) is trading above our estimate of fair value (HK$3.9)

Significantly Below Fair Value: 2638 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 2638 is poor value based on its PE Ratio (28.7x) compared to the HK Electric Utilities industry average (13.8x).

PE vs Market: 2638 is poor value based on its PE Ratio (28.7x) compared to the Hong Kong market (10.9x).


Price to Earnings Growth Ratio

PEG Ratio: 2638 is poor value based on its PEG Ratio (11.1x)


Price to Book Ratio

PB vs Industry: 2638 is overvalued based on its PB Ratio (1.5x) compared to the HK Electric Utilities industry average (1x).


Next Steps

Future Growth

How is HK Electric Investments and HK Electric Investments forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

2.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2638's forecast earnings growth (2.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 2638's earnings (2.6% per year) are forecast to grow slower than the Hong Kong market (22.2% per year).

High Growth Earnings: 2638's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2638's revenue (5.1% per year) is forecast to grow slower than the Hong Kong market (13.3% per year).

High Growth Revenue: 2638's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2638's Return on Equity is forecast to be low in 3 years time (5.5%).


Next Steps

Past Performance

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

-7.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2638 has high quality earnings.

Growing Profit Margin: 2638's current net profit margins (23.1%) are lower than last year (24.9%).


Past Earnings Growth Analysis

Earnings Trend: 2638's earnings have declined by 7.9% per year over the past 5 years.

Accelerating Growth: 2638's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2638 had negative earnings growth (-12.5%) over the past year, making it difficult to compare to the Electric Utilities industry average (-17.9%).


Return on Equity

High ROE: 2638's Return on Equity (5.1%) is considered low.


Next Steps

Financial Health

How is HK Electric Investments and HK Electric Investments's financial position?


Financial Position Analysis

Short Term Liabilities: 2638's short term assets (HK$3.0B) do not cover its short term liabilities (HK$23.0B).

Long Term Liabilities: 2638's short term assets (HK$3.0B) do not cover its long term liabilities (HK$40.2B).


Debt to Equity History and Analysis

Debt Level: 2638's debt to equity ratio (95.4%) is considered high.

Reducing Debt: 2638's debt to equity ratio has reduced from 97.6% to 95.4% over the past 5 years.

Debt Coverage: 2638's debt is not well covered by operating cash flow (13.6%).

Interest Coverage: 2638's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet


Next Steps

Dividend

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

4.06%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2638's dividend (4.06%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 2638's dividend (4.06%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.97%).


Stability and Growth of Payments

Stable Dividend: 2638 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2638 has only been paying a dividend for 7 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (116.5%), 2638's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2638's dividends in 3 years are not forecast to be well covered by earnings (107.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.1yrs

Average management tenure


CEO

Chi Tin Wan (70 yo)

6.83yrs

Tenure

HK$17,810,000

Compensation

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 ...


CEO Compensation Analysis

Compensation vs Market: Chi Tin's total compensation ($USD2.30M) is above average for companies of similar size in the Hong Kong market ($USD628.98K).

Compensation vs Earnings: Chi Tin's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Kin Ning Fok
Executive Chairman6.83yrsHK$760.00k0.023%
HK$ 15.8m
Chi Tin Wan
CEO & Executive Director6.83yrsHK$17.81mno data
Cho Ying Cheng
Executive Director & Operations Director6.83yrsHK$6.02mno data
Loi Shun Chan
Executive Director8.33yrsHK$3.25mno data
Daobiao Chen
Executive Director2.42yrsHK$3.45mno data
Kim Man Wong
Chief Financial Officer10.08yrsno datano data
Wai Cheong Ng
Group Legal Counsel & Company Secretary11.92yrsno datano data
Yuk Chun Yeung
General Manager of Public Affairs17.25yrsno datano data
Tak Chow Yee
General Manager of Corporate Development44.17yrsno datano data
Wu Kwok Kwong
General Manager of Human Resources6.33yrsno datano data
Kai Sum Tso
Senior Adviser of The Group6.83yrsno datano data

10.1yrs

Average Tenure

59yo

Average Age

Experienced Management: 2638's management team is seasoned and experienced (10.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kin Ning Fok
Executive Chairman6.83yrsHK$760.00k0.023%
HK$ 15.8m
Chi Tin Wan
CEO & Executive Director6.83yrsHK$17.81mno data
Cho Ying Cheng
Executive Director & Operations Director6.83yrsHK$6.02mno data
Loi Shun Chan
Executive Director8.33yrsHK$3.25mno data
Daobiao Chen
Executive Director2.42yrsHK$3.45mno data
George Magnus
Independent Non-Executive Director6.83yrsHK$90.00kno data
Ronald Joseph Arculli
Non Executive Director6.83yrsHK$180.00k0.000010%
HK$ 7.0k
Tzar Kuoi Li
Deputy Chairman5.92yrsHK$360.00kno data
Ralph Raymond Shea
Independent Non-Executive Director5yrsHK$100.00kno data
Lan Yee Lee
Independent Non-Executive Director6.83yrsHK$160.00kno data
Donald Jeffrey Roberts
Independent Non-Executive Director6.83yrsHK$170.00k0.016%
HK$ 11.0m
Chi Wai Fong
Independent Non Executive Director6.83yrsHK$100.00kno data

6.8yrs

Average Tenure

68.5yo

Average Age

Experienced Board: 2638's board of directors are considered experienced (6.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

HK Electric Investments and HK Electric Investments Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: HK Electric Investments and HK Electric Investments Limited
  • Ticker: 2638
  • Exchange: SEHK
  • Founded: 1889
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: HK$69.806b
  • Shares outstanding: 8.84b
  • Website: https://www.hkelectric.com

Number of Employees


Location

  • HK Electric Investments and HK Electric Investments Limited
  • Hongkong Electric Centre
  • 44 Kennedy Road
  • Hong Kong
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2638SEHK (The Stock Exchange of Hong Kong Ltd.)YesStapled SecuritiesHKHKDJan 2014
HKTDB (Deutsche Boerse AG)YesStapled SecuritiesDEEURJan 2014
HKCV.FOTCPK (Pink Sheets LLC)YesStapled SecuritiesUSUSDJan 2014
HKVT.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 2014

Biography

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 com ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/30 12:57
End of Day Share Price2020/10/30 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.