Citigroup has issued a research report following the announcement of POWER ASSETS' (00006) full-year results for the period ending December last year. The firm reiterated its "Buy" rating on the stock, citing the group's low business risk profile, with the majority of earnings derived from regulated return assets. The substantial disposal gain of HK$45 billion, or HK$21.1 per share, from the sale of a 40% stake in UK Power Networks highlights significant hidden value within the group's asset portfolio and points to potential profit growth through mergers and acquisitions.

Using a sum-of-the-parts (SOTP) valuation method, Citigroup raised its target price for POWER ASSETS by 19%, from HK$59 to HK$70, factoring in projected sales for the first half of 2026. The report also noted that while the group's expected dividend yield of 4.5% for 2026 is not particularly high, there is potential for yield expansion should a major acquisition occur. If no large-scale M&A activity materializes over the next 12 to 18 months, the company may instead opt to distribute a special dividend, similar to the special payout made between 2016 and 2017 following the spin-off of HK Electric-SS (02638) in 2014.