Changes in Hong Kong stocks | Electric Energy Industry (00006) rose nearly 3%. Institutions say the balance sheet has strengthened significantly since the company sold related UK businesses

The Zhitong Finance App learned that Electric Energy Industry (00006) rose nearly 3%. As of press release, it had risen 2.24% to HK$59.35, with a turnover of HK$140 million.

According to the news, Changjiang Infrastructure, Electric Energy Industry and Changshi Group jointly announced that they will sell all of their interests in the British power grid company UK POWER NETWORKS (UKPN). The buyer is French energy giant Engie. HSBC Global believes that the balance sheet of the Yangtze River Infrastructure and Electric Energy Industry has been significantly strengthened after the sale of the UK Power Grid and British Railway projects, creating opportunities for meaningful acquisitions to drive growth and/or pay special dividends. The bank estimates that the net cash of Changjian and Electric Energy will be equivalent to 24% and 42% of their equity value, respectively.

HSBC Global added that inflation-linked adjustments will accelerate medium-term profit growth for regulated assets, particularly in the UK and Australia. Both the value of regulated assets and allowable revenue will rise with inflation. Coupled with the increase in return allowed after the recent regulatory reset, the momentum for profit growth is expected to increase. The bank raised the investment rating of the Electric Energy Industry from “hold” to “buy”, and the target price was raised from HK$56 to HK$70.