The rating on Power Assets Holdings Ltd. (PAH) reflects the credit strength of the company's 100% owned subsidiary Hongkong Electric Co. Ltd. (HEC: A+/Stable/--; cnAAA) and the stable cash flow from PAH's overseas investments in regulated utilities. These strengths are offset by PAH's increased appetite for expansion outside Hong Kong and the structural subordination of the company's equity cash flows from its overseas investments. We view PAH's business risk profile as "excellent," primarily due to the company's regulated and vertically integrated electric utility business in Hong Kong. PAH's investments in utilities in developed markets overseas generally have strong-to-excellent business risk profiles. This is mainly due to the monopoly position of these utilities and their steady and predictable cash flows within...
Companies mentioned in this report are:
- Power Assets Holdings Ltd.
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