夏威夷电力工业（HE）：立法突破开启前行道路，但上行潜力需时日显现

2026E0.921.041.011.054,2640.9% 2027E2028E1.030.981.081.174,5534,7071.7%15.0% Julien Dumoulin-Smith * | Equity Analyst+1 (281) 774-2066 | jds@jefferies.comPaul Zimbardo * | Equity Analyst+1 (212) 778-8497 | pzimbardo@jefferies.comJamieson Ward, CFA * | Equity Analyst+1 (281) 774-2081 | jamieson.ward@jefferies.comBrian Russo, CFA * | Equity Analyst+1 (212) 778-8559 | brusso@jefferies.comTanner James, CFA * | Equity Analyst+1 (212) 788-8667 | tjames@jefferies.comWhitney Mutalemwa * | Equity Associate+1 (212) 707-6413 | wmutalemwa@jefferies.comEthan Corcoran * | Equity Associate+1 (212) 284-2462 | ecorcoran@jefferies.comSpark Li * | Equity Associate+1 (713) 308-4573 (office) | sli8@jefferies.comSource: Bloomberg, Jefferies analysis. The Long View: Hawaiian Electric IndustriesInvestment Thesis / Where We DifferHawaiian Electric Industries (HE) is at a critical juncture, dealing with thesignificant financial and operational impacts of the 2023 Maui wildfire. Thecompany's ability to navigate these challenges will determine its financialstability and future growth potential. While the core utility business remainsintegral to Hawaii's energy landscape, both the uncertainty surroundingpotential future wildfire liabilities, along with how the remainder of the Mauiwildfire tort litigation settlement obligation will be financed, remain overhangs.We maintain a Hold rating. We view settlement finalization and clarity on 2025legislation as potential upside risks.Base Case,$11.25, +3%Thisvaluation incorporates segment-specificgrowth dynamics and risks, including the sale of90.1% of ASB, HECO (utility) based on 2027E P/E,and highlighting the corporate leverage by addingback half of the parent interest and subtracting halfof the parent debt from our equity valuation.Sustainability MattersTop Material Issues:1. Material Sourcing and Efficiency:Hawaiian Electric relies heavily on renewable energy sources andefficient grid management. Issues such as resource scarcity, regulatory compliance, or climate changecould impact the company's ability to meet energy demands sustainably.2. Product Design & LifecycleManagement:Hawaiian Electric's infrastructure and energy solutions must be designed with long-termresilience in mind, ensuring efficiency, minimal environmental impact, and adaptability to technologicaladvancements and climate risks.Company Target(s):1.Increase renewable energy contribution to 40% of total generation by 2030.2.Achieve a 70% reduction in greenhouse gas emissions by 2040 compared to 2005 levels.Questions to Management:1.How should we think about how the remainder of the settlement will befinanced?2.What steps are being taken to ensure that renewable energy sources are integrated into thegrid in a sustainable, reliable manner?3.What resources are being allocated to enhance grid resilienceand minimize environmental impact over the lifecycle of energy infrastructure?Please see important disclosure information on pages 17 - 23 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Risk/Reward - 12 Month View403530252015105Upside Scenario,$15, +38%Our upside case reduces the discounts applied tothe utility and bank, and assumes the passage offavorable legislation in the 2025 session, settinga path toward a return to investment grade creditratings at both the utility and the HoldCo. Inthis scenario, HE's improved financial flexibility,combined with favorable regulatory outcomes,would support higher profitability, allowing thecompany to restore dividend payments sooner aswell. Downside Scenario,$9, -17%In our downside case, we assume growing lagdue to a scenario where new rates effective forthe subsequent multiyear period after the expiryof the current period in 2026 are insufficient,and that efforts to obtain legislation in 2025 areunsuccessful.CatalystsGovernor signing wildfire bills into lawFinalization of Maui wildfire settlement (expecting4Q25)RenewableenergyintegrationmodernizationPerformanceIncentiveachievementPotential announcements of additional sales ofnoncore assets (e.g., remaining 9.1% ASB stake,Pacific Current projects, etc.)Improved credit ratings and trajectory andgridMechanisms(PIMs)2 Valuation Presents Asymmetric Opportunity, But PathHigher Remains UnclearHE trades at a -39% discount to utility peers despite improved fundamentals.The stock's 2027EP/E discount vs. comparable electric utilities reflects continued investor skepticism about thecompany's long-term prospectsdespite significant legislative and operational progress. As theseimprovements become operational reality rather than legislative promise, the valuation discountshould compress, we believe. However, we expect this to be a slow process, and one with severaloverhangs, including the actual level at which the wildfire liability cap will be set (to be determinedby the PUC).Our forecasts are below consensus but suggest downside protection with upside optionality.The 2.2% EPS CAGR in our