CLPHY - CLP Holdings: Increased Competition In Australia Could Be A Potential Drag
Elevator Pitch
I assign a "Neutral" rating to Hong Kong-listed CLP Holdings Limited (CLPHY) (CLPHF) [2:HK]. I have a favorable view of CLP Holdings' core Hong Kong business, which is a regulated monopoly earning an 8% return on average net fixed assets, with future growth secured by a HK$52.9 billion capital investment program. But the company's Australian business does not have a regulatory moat like its Hong Kong business. CLP Holdings' Australian retail business, EnergyAustralia, faces increased competition in the Australian retail business from new entrants Ovo Energy and Royal Dutch Shell.