Hong Kong Electric Investments Trust faces renewed regulatory risks

It could face subdued returns.

Hong Kong Electric Investments Trust faces the risk of subdued returns amid the government's proposal to import electricity from the mainland in recent months.

According to a research note from Barclays, HKEIT campaigned aggressively against the government’s proposal.

However, if the government eventually decides to import more electricity from the mainland, it wouldn’t require as much local generation capacity.

Hence, HKEIT faces the risk of subdued returns.

Here's more from Barclays:

HKEIT issued its 1H14 results after the morning session on 21 July. 1H14 DPU was HK$0.1653. We view the results as in line with our expectation, as the 1H14 DPU and EBITDA both account for 40% of our full-year estimates. Feb-Jun (HKEIT listed at end-Jan) electricity consumption accounted for an average 39% of full-year volumes in the most recent five years.

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