STOCKWATCH: Hongkong Electric flat ahead of results

HONG KONG (AFX-ASIA) - Hongkong Electric Holdings Ltd share prices were flat ahead of the company's final results due out today,dealers said. HSBC Securities analyst David Yip said the final results are unlikely to give any surprises given the little contribution from operations outside of the Scheme of Control. The company is expected to post 5.5 bln hkd in net profits, which translates to 2.682 hkd in earnings per share for 2000, hesaid. "The company is worth buying in terms of its yield. It can at least provide 5 pct in yield, higher than saving accounts which offer only around 3.75 pct," he said. At 11:13 am, Hongkong Electric Holdings Ltd was unchanged at 29.10 on volume of 283,950, while the Hang Seng utility sub-index was down 44.89 points at 22,048.18. The Hang Seng Index was down 161.71 points at14,015.65. Unlike CLP Holdings, Hongkong Electric has only focused on mature and deregulated markets such as Australia to expand its overseas businesses, Yip add ed. "So, lower risk means a lower return for thecompany," he said. CLP Holdings was down 0.2 at 40.0. However, Yip said the company will remain a top pick in the utility sector in Hong Kong, with a target price of 32.0 hkd. "Earnings growth for local utilities depends on their capital expenditure under the Scheme of Control. The higher the capex, the higher the return," he said. Looking ahead, he said he expects capex in 2001 will remain flat until the rollout of Lamma Extension in 2003. The company said earlier that it has approved a financial plan with capital expenditure totalling 27 bln hkd for the period 1999 - 2004, of which about 20 pct will be for the Lamma Extension.

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