CLSA upgraded CKH Holdings to High-Conviction Outperform with a HKD102 target price, citing asset monetization progress. The broker expects the company's net debt-to-equity ratio to fall to 3.7% in 2026, with a potential return to net cash after port asset sales.
CLSA upgraded CKH Holdings to High-Conviction Outperform with a HKD102 target price, citing asset monetization progress since 2020.
"CKH has continued to advance asset monetization since 2020, generating substantial cash inflows," CLSA said in a research report.
The broker expects CKH's consolidated net debt-to-equity ratio to plunge to 3.7% in 2026 from 17.1% in 2025, factoring in only the disposals of UK Rails, UKPN and VodafoneThree. Upon completion of the port asset sale, the company would return to a net cash position, CLSA said.
CKH shares have rebounded 74% since early 2025 but still trade at a 51% discount to the forecast 2026 NAV per share of HKD146, indicating attractive valuation. CLSA named CKH one of its top two picks in the Hong Kong conglomerates sector.
Under the current geopolitical backdrop, CKH's overseas investment exposure has effectively narrowed, providing room to distribute special dividends after completing asset disposals. The company has distributed special dividends three times over the past 12 years. If the group opts to retain cash, its low valuation and strong cash reserves could also make it a potential privatization target similar to Hopewell Holdings, CLSA said.
The upgrade signals that CLSA sees CKH's asset monetization strategy as a catalyst for significant balance sheet improvement and potential shareholder returns. Investors will watch for updates on the port asset sale and any special dividend announcements.
This article is for informational purposes only and does not constitute investment advice.
