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<Research>Citi Adds CKI HOLDINGS (01038.HK) TP to $62.5, Keeps Rating at Buy on Acquisition Opportunity
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CKI HOLDINGS (01038.HK) reported a 1% YoY increase in net profit to $4.348 billion in 1H25, 3% below Citi Research's expectation, mainly due to lower-than-expected foreign exchange gains, increased financing costs and lower-than-expected profit from its Australian business, Citi Research issued a research report saying. Based on the discounted cash flow method, the broker added its target price by 0.8% to $62.5 from $62. Citi Research kept rating at Buy on CKI HOLDINGS and its top pick among Hong Kong utilities, since (1) acquisition transactions are expected to drive 2026 net profit to $936 million, up 11%; (2) US interest rate cuts will re-rate CKI HOLDINGS' valuation - if US treasury yields decrease by 50 bps, based on historical correlations, CKI HOLDINGS' dividend yield may narrow by 37.5 bps, potentially boosting the stock price by 8%; (3) the current projected PE ratio of 14.0x, PB ratio of 1.1x and dividend yield of 4.7% are attractive. AASTOCKS Financial News Website: www.aastocks.com |
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