Hub Power Company (HUBC) announced higher consolidated profit after tax of Rs5.6 billion (EPS: Rs4.29) for 1QFY20. The result was above expectation due to higher than expected gross profit and share of profit from associates contributing Rs1.8 billion. Higher earnings for 1QFY20 can be attributed mainly to: 1) a 55%YoY increase in gross profits led by 27% rupee depreciation and lower utilization of inefficient Hub base plant along with, 2) profits from 47.5% holding in China Power Hub Generation Company (CPHGC) reported at Rs1.8 billion EPS: Rs1.44 as the unit commenced commercial operations in mid August 2019. The impact of new coal based power plant running at full capacity would be more visible in the upcoming quarter. Finance cost and admin cost were up keeping the bottom-line growth in check. On sequential basis, a 24% higher finance cost was the only major earnings dampener due to higher policy rate. HUBC did not announce any dividends along with its 1QFY20 results, constrained by debt-based capex financing. Analysts await management clarification on capex plans for its upcoming water desalination project before updating investment case of HUBC.