This report does not constitute a rating action. Overview Key strengths Key risks Large and diversified portfolio comprising mostly regulated utility assets. Increasing geopolitical uncertainties that raise risks for business operations and expansion abroad. Stable regulatory frameworks that underpin solid operating cash flow. Interest cost and potential preferred share redemption that constrain leverage improvement. Strong support from parent and government in strategy, operations, and funding access. Execution risks of increasing greenfield developments. Operating cash flow from the company's regulated assets is likely to remain steady at HK$23 billion-HK$25 billion annually in 2025-2026, more than sufficient to cover rising capital expenditure (capex) and high dividend payouts. The successful renewal of distribution concessions for the next 30 years in Brazil enhances the
