Key Takeaways:
UBS boosted its price target for CKH Holdings (00001.HK) by 26 percent to HKD 84.6 from HKD 67, citing upside from the conglomerate's energy holdings and recent asset sales.
The bank, which reiterated its "Buy" rating, said in a report that the market may be underestimating the earnings contribution from Canada-based Cenovus Energy, in which CKH has a significant stake.
UBS noted that Cenovus' first-quarter earnings spiked 83 percent year-over-year as oil prices remained elevated. The bank also factored in expected disposal gains of HKD 14.5 billion from UK Power Networks and HKD 4.7 billion from a Vodafone-Three transaction. As a result, UBS lifted its basic earnings forecasts for CKH from 2026 to 2028 by 95 percent, 7 percent, and 2 percent, respectively.
The revised forecasts led UBS to increase its dividend per share estimates for 2026 and 2027 by 32 percent and 6 percent. The bank's valuation maintains a 45 percent discount to its net asset value assumption.
The upgrade suggests UBS sees significant value in CKH's portfolio assets that may not be fully reflected in the current share price. Investors will watch the company's upcoming earnings reports to see if the projected gains from Cenovus and asset sales materialize as forecasted.
This article is for informational purposes only and does not constitute investment advice.
