HUBC has emerged as a promising long-term investment, driven by strong financial performance and strategic initiatives. Below is a detailed look at HUBC’s recent developments and future prospects.
For the nine months ending in FY24, HUBC reported a consolidated Earnings Per Share (EPS) of PKR 38.2, compared to PKR 25.94 during the same period last year. This increase is mainly attributed to the full impact of Thar Energy (TEL) and ThalNova (TNPTL) projects commencing in October 2022 and February 2023, respectively.
The focus of the company is on paying back the loans they took for TEL and TNPTL. This may mean lower dividends in the short term. But in the long run, it may save them much more money which is eventually going to be passed on to the shareholders sooner or later.
Expected Financial Metrics:
Based on a recent report by SCS Research, here’s what we can expect in the 4th quarter.
According to AKD Research, the expected EPS for the fiscal year stands at Rs. 57.9 accompanied by an annual dividend yield of 15.2%.
HUBC, through its subsidiary Hub Power Holdings Limited (HPHL), has been prequalified for K-Electric’s (KEL) 200MW wind/solar hybrid project.
HPHL has also been prequalified for 150MW and 120MW of the Sindh Solar Energy Project (SSEP) for power off-take by KEL.
HUBC signed a Memorandum of Understanding (MoU) with KE for converting two units of the RFO-fired Hub Power plant to Thar coal after the existing Power Purchase Agreement (PPA) expires in March 2027.
HUBC is exploring opportunities in Battery Energy Storage Solutions (BESS) and the Electric Vehicles (EV) value chain. Earlier, there were mentions in the business media about a potential collaboration with China’s top EV manufacturer, Build Your Dreams (BYD).
In November 2023, HUBC’s joint venture, China Power Hub Generation Company (CPHGC), disbursed its first dividend amounting to USD 70 million. HUBC received USD 32 million from this disbursement.
HUBC has entered into a Share Purchase Agreement (SPA) with Habib Bank Limited (HBL) to acquire approximately 9.5% shares in Sindh Engro Coal Mining Company (SECMC).
Following the commencement of ThalNova Power Thar (TNPTL) and TEL, and the dividend start from CPHGC, HUBC has accelerated loan repayments. In the first half of FY2024, HUBC repaid PKR 2.3 billion, reducing total outstanding loans to PKR 17.2 billion as of December 31, 2023, down from PKR 19.5 billion on June 30, 2023.
PIOGC, a 50-50 joint venture between HPHL and ENI’s local employees, aims to expand HUBC’s portfolio into oil and gas exploration. PIOGC owns multiple gas fields in zones 2 and 3 of Sindh.
| Subsidiary | Holding |
|---|---|
| Laraib Energy (LEL) | 74.95% |
| Hub Power Services Ltd (HPSL) | 100% |
| Hub Power Holdings Ltd (HPHL) | 100% |
| Narowal Energy Ltd (NEL) | 100% |
| Thar Energy (TEL) | 60% |
| Associate | Holding |
|---|---|
| China Power Hub Generation Co (CPHGC) | 47.50% via HPHL |
| ThalNova Power Thar (TNPTL) | 38.30% via HPHL |
Joint Ventures
| Joint Venture | Holding |
|---|---|
| Prime International Oil and Gas Co | 50% via HPHL |
| China Power Hub Operating Co (CPHO) | 49% via HPHL |
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