CLP Earnings: Australian Profit Recovery on Track, Shares Not Cheap

CLP's first-half 2024 profit performance is largely within our expectations, and we only make minor adjustments to our estimates. The changes are negligible and our fair value estimate for CLP rises to HKD 64 from HKD 63 mainly due to the rolling of our discounted cash flow value. Our fair value estimate prices CLP at 1.4 times price/book and 7.8 times EV/EBITDA, both of which are within its historical range. CLP's share price has outperformed since June and particularly against the recent market volatility given its stable earnings and decent dividend yield of around 4.5%. We now think the shares are slightly overvalued. Interim dividend of HKD 0.63 is unchanged from 2023 level and in line with our assumed unchanged dividend for full-year 2024.