Asia Utilities Strategy
2H09 Outlook: Easy Money Made, Now Turn to Specifics
Stock-specific catalysts needed for next leg up — Asian utilities have on average
rallied 38% YTD on lower fuel costs, which should raise the sector’s 09E OP
margin 1.2ppt yoy, to 23%, and NP margin 3.6ppt, to 24.2%. Now that fuel costs
are stabilizing rather than declining, stock-specific catalysts are needed to feed
any outperformance. Our 2H09 top picks are CRP, Huadian, CKI, Tanjong, PGAS.
China: CRP, Huadian now top buys — We replace Huaneng and CPI with CRP and
Huadian in our top buys list: CRP should benefit from new EPS-accretive coal
mine projects in 2H09E after a rights issue, and Huadian's profitability looks set to
jump in FY09E thanks to lower coal costs and tax credits brought forward from its
Rmb2.6bn net loss in FY08.
Hong Kong: CKI a top buy — HK power companies would underperform if bond
yields rise. We add CKI to our top buys, expecting overseas expansion in 2H09E.
Korea: Mixed outlook for Kepco — Expect a net loss in 2Q09E despite a W220bn
rebate from KOGAS, but a net profit in 3Q09E on lower contracted coal costs.
SE Asia and India: Tanjong and PGAS preferred — We like both stocks for their
predictable earnings and inexpensive valuations. Indian stocks look expensive.
Top Sells — HKCG looks expensive and its recent rally is driven by a share
buyback, which history says would be capped at HK$16.20. We do not like China
power-equipment companies because the industry is in a downcycle, and
expectations from more wind and nuclear power equipment sales appear overdone.

目录

2H09E Outlook 3
China: Power 17
Power Equipment 26
Gas 33
Hong Kong: Power 36
India: Gas 42
Power 47
Indonesia Gas 54
Malaysia Power 56
Pakistan Power 67
Companies 72
CESC (CESC.BO) 73
Cheung Kong Infrastructure Holdings (1038.HK) 76
CLP Holdings (0002.HK) 90
China Power International (2380.HK) 103
China Resources Power (0836.HK) 116
Datang International Power Generation (0991.HK) 130
Dongfang Electric Corporation (1072.HK) 145
GAIL (GAIL.BO) 157
Gujarat Gas (GGAS.BO) 160
Gujarat State Petronet (GSPT.BO) 164
Harbin Power Equipment (1133.HK) 168
Hong Kong & China Gas (0003.HK) 179
Hongkong Electric (0006.HK) 192
Huadian Power International (1071.HK) 203
Huaneng Power International (0902.HK) 216
Hub Power (HPWR.KA) 229
Indraprastha Gas (IGAS.BO) 232
KEPCO (015760.KS) 235
NTPC (NTPC.BO) 248
Petronet LNG (PLNG.BO) 252
Power Grid Corporation of India (PGRD.BO) 255
PT Perusahaan Gas Negara (PGAS.JK) 259
Reliance Infrastructure (RLIN.BO) 264
Shanghai Electric Group (2727.HK) 266
Tanjong (TJPL.KL) 282
Tata Power (TTPW.BO) 289
Tenaga Nasional (TENA.KL) 292
Xinao Gas Holdings (2688.HK) 301
YTL Power International (YTLP.KL) 311
Appendix A-1 320