The analyst rating for HKELECTRIC-SS (02638.HK) is Neutral, as stated by Citi. The reasoning behind this rating includes a slightly lower-than-expected profit attributable to holders of Share Stapled Units, which was 3.4% below market forecasts due to a higher-than-expected growth in direct costs. Although HKELECTRIC-SS is expected to have moderate earnings growth in the long term based on regulated asset base expansion, the projected sustainable dividend yield of 4.7% for 2026-28 is considered unattractive, being only marginally higher than the yield on the US 10-year Treasury. Additionally, Citi prefers GUANGDONG INV (00270.HK) within the Hong Kong utilities sector, which has a more favorable forecast dividend yield of 6.1% for 2026.
