Utilities Sector

• On the 10th December 2024, ReNew Energy Global (RNW US), an Indian renewable energy play, announced US$7.07/share NBIO. The bidding consortium subsequently bumped terms to US$8/share on the 3rd July.
• After shares traded through terms for a week, the Consortium increased (best & final) non-binding terms to US$8.15/share, a 29% premium to undisturbed. The Offer is via a UK Scheme.
• That last bump was on the 10th October. JERA, with 11.7% of shares out, and 25.7% of minorities, is supportive, IF terms are firmed. The Special Committee is still mulling.

• Maynilad Water Services (MWS) raised around US$520m in its Philippines IPO.
• MWS is a leading global water utility player operating the largest concession by population served within a single concession area in the Philippines and Southeast Asia (SEA), as per GlobalData.
• We have looked at the past performance in our previous note. In this note, we talk about the trading dynamics.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Energy Solutions, Adani Ports, Bharti Airtel
• UST yields declined c. 3 bps across the curve yesterday as treasuries advanced amid a slump in risk assets, with the yield on the 2Y and 10Y UST falling to 3.58% and 4.09%, respectively.
• Equities retreated, after several Wall Street chief executives expressed caution about stretched valuations.

• We now expect the privatisation of ENN Energy (2688 HK) to be completed by mid-2026, given that the pre-conditions are yet to be satisfied.
• For 3Q25, the gas sales volume of ENN Energy has picked up. Meanwhile, net profit for ENN Natural Gas has also recovered. Both results are positive.
• Incorporating our latest timetable estimate, EPS forecasts, and adjusted undisturbed PERs, ENN Energy is valued at HK$67.40-72.16, meaning the share price is at 0.4% to 7% discount.

• NextEra Energy, Inc. recently reported its third quarter financial results for 2025, focusing on strong operational accomplishments and future prospects across its business segments.
• The company’s adjusted earnings per share increased by 9.7% year-over-year, with significant contributions from both Florida Power & Light Company (FPL) and NextEra Energy Resources.
• FPL reported a robust quarter, with its earnings per share growing $0.08 year-over-year, primarily due to an 8% increase in regulatory capital employed.

• Dominant Regional Utility with Favorable Regulatory Tailwinds: Shin Hsiung Gas operates as a regulated natural gas utility in Kaohsiung, Taiwan, benefiting from a stable, concession-based business model. The company is poised to capitalize on Taiwan’s national energy policy, which aims to increase the share of natural gas in power generation to 50% by 2025, driving secular demand growth.
• Diversifying Revenue Streams and Strong Growth Profile: While core gas sales provide a stable foundation, the company is expanding into solar electricity sales and equipment installation, demonstrating a forward-looking strategy. This is reflected in its strong growth metrics, with a 5-year net income CAGR of 7.37% and a remarkable 3-year dividend CAGR of 64.36%.
• Moderate Valuation with Key Risks: The company trades at a P/E ratio of 24.6x. While its growth is robust, it faces risks tied to commodity price volatility, regulatory oversight on pricing, and high dependency on imported Liquefied Natural Gas (LNG) for its supply. Taiwan’s energy security is a key national concern, which could impact long-term supply stability.

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• Sintana Energy is acquiring Challenger Energy at a 0.4705x exchange ratio, with a 15% actionable spread.
• Charlestown Capital Advisors orchestrates the merger, holding significant stakes in both companies and providing financial support.
• Merger approval requires 75% of Challenger votes, with 34% already committed, and regulatory approvals expected smoothly.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Energy Solutions, Nissan Motor
• UST yields rose slightly yesterday, led by the long end, owing to increased corporate bond supply (including Meta Platform’s USD 30 bn offering). The yield on the 2Y UST was up 1 bp at 3.61%, while the yield on the 10Y UST increased 2 bps to 4.10%.
• Equities slumped, driven by a sell-off in large tech stocks. The S&P 500 declined 1.0% to 6,822, while the Nasdaq fell 1.6% to 23,581. US President Donald Trump and his Chinese counterpart Xi Jinping have concluded a summit in Busan, South Korea, in their first meeting since 2019. 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Green Energy, ReNew Energy
• UST yields climbed 8-11 bps across the curve yesterday. This came as Fed Chairman Jerome Powell sought to temper market expectations for a December rate cut, following the central bank’s widely anticipated 25-bp rate reduction.
• The UST curve bear flattened, with the yield on the 2Y UST jumping 11 bps to 3.60%, while that on the 10Y UST climbed 10 bps to 4.08%. Equities gave up their intraday gains, with the S&P 500 closing flat at 6,891.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Oil & Gas, SK Hynix, Meituan, Pakuwon Jati, Nissan Motor
• UST yields were little changed yesterday, with little response to a soft auction of 7Y notes. The market focus will be on the FOMC rate decision today, with the Fed largely expected to reduce rates by another 25 bps.
• Equities notched fresh record highs, supported by expectations of strong Q3/25 earnings from major tech firms.

• CenterPoint Energy reported its financial results for the third quarter of 2025, highlighting a significant performance and strategic focus.
• The company posted diluted earnings per share (EPS) of $0.45 on a GAAP basis and $0.50 on a non-GAAP basis, the latter marking a 60% increase compared to the third quarter of 2024.
• This substantial improvement in non-GAAP EPS is attributed to enhanced operational efficiency and effective capital recovery mechanisms.

• NextEra Energy Partners (NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NEE) to own and operate a portfolio of contracted clean energy projects, primarily wind and solar, as well as natural gas pipelines.
• The company’s business model has been significantly challenged by the high interest rate environment, which has increased its cost of capital and forced a reduction in its distribution growth targets, impacting its ability to act as a primary funding vehicle for NEE.
• While NEP benefits from a strong sponsor relationship with NEE, providing a pipeline for growth, and stable cash flows from long-term contracts, its high leverage and dependence on capital markets for acquisitions create significant risks for investors.

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• Leading Pure-Play Renewable Power Platform: Brookfield Renewable Partners (BEP) is one of the world’s largest publicly traded, pure-play renewable power platforms, with a diversified portfolio across hydro, wind, solar, and energy transition assets. Its global scale and the strong sponsorship of Brookfield Asset Management provide significant competitive advantages in sourcing and financing growth opportunities.
• Visible Growth Trajectory Fueled by Decarbonization: The company has a massive development pipeline and is well-positioned to capitalize on the accelerating global demand for clean energy, driven by corporate decarbonization goals and trends like AI and electrification. Management targets 12%-15% long-term total annualized returns, supported by a goal of 5%-9% annual distribution increases.
• Financial Profile Under Pressure: Despite strong revenue growth and a track record of increasing distributions, the company has consistently reported net losses and negative free cash flow due to high growth-oriented capital expenditures and depreciation. Its high debt load is a key consideration, although near-term maturities are limited and a majority of its debt is at fixed rates.

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