<Research>JPM Maintains Overweight Rating for CKH HOLDINGS (00001.HK) Despite Minimal Effects from Panama Port Decision
Share Price Decline: CKH HOLDINGS' share price fell by 4.6% following a ruling by Panama's Supreme Court that deemed its port concession unconstitutional.
Limited Impact on Earnings: JPMorgan noted that the ports in question contribute less than 1% to CKH HOLDINGS' EBITDA, suggesting the ruling's impact is minimal.
Earnings Recovery Outlook: The broker believes CKH HOLDINGS is on a moderate earnings recovery path, projecting a 4% compound annual growth rate (CAGR) over the next three years.
Investment Rating: JPMorgan maintained an Overweight rating for CKH HOLDINGS, setting a target price of $68 despite the recent developments.
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CKH: Ongoing Functionality of Two Panama Canal Ports Relies Exclusively on Decisions by Panama's Supreme Court and Government
CKH Holdings Dispute with Panama: CKH Holdings has notified Panama of a dispute under an investment protection treaty due to measures affecting its subsidiary, Panama Ports Company S.A. (PPC), following a Supreme Court ruling declaring a key law unconstitutional.
Legal Actions and Operational Uncertainty: CKH is pursuing legal recourse, including arbitration, while facing potential forced exit from port operations at Balboa and Cristobal, with no assurances from the Panamanian State regarding PPC's future operations.
<BofAS Analysis> Ratings and Target Prices for Hong Kong Property Developers and Landlords (Table)
Property Developers Performance: Various property developers showed mixed performance with SHK PPT and Henderson Land rated as neutral, while CK Asset and Sino Land received buy ratings. New World Development was rated underperform.
Landlords Overview: Hysan Development and Swire Properties experienced declines, but all listed landlords, including Wharf REIC and Hang Lung Properties, received buy ratings, indicating positive market sentiment.
REITs Market Status: LINK REIT saw a significant increase in share price and was rated a buy, reflecting optimism in the REIT sector.
Conglomerates Insights: MTR Corporation and CKH Holdings were rated underperform and buy respectively, with short selling activity indicating varying investor confidence in these conglomerates.
HPH Trust Reports 15% Increase in 2025 Profit Attributable to Unitholders, Reaching $748M
CKH Holdings Stock Performance: CKH Holdings (00001.HK) experienced a decline of 1.400 points, or 2.129%, with a short selling volume of $266.01 million and a ratio of 32.551%.
Hutchison Port Holdings Trust Financial Results: Hutchison Port Holdings Trust reported a 2.6% year-over-year increase in revenue and other income to $11.863 billion for the year ending December 2025, with a profit attributable to unitholders of $748 million, reflecting a 15.1% increase.
Distribution Per Unit (DPU) Decline: The final DPU for Hutchison Port Holdings Trust was reported at 6.5 cents, which is a decrease of 9.7% compared to the previous year.
Analyst Downgrade: Daiwa downgraded CKI Holdings (01038.HK) to "Outperform," citing unchanged fundamentals but indicating that positive factors have already been priced in.
HSI Declines by 37 Points; Commodities Maintain Recovery; TENCENT Under Pressure
Market Overview: The HSI opened lower by 0.1% at 26,797, with the HSCEI and HSTECH also experiencing declines of 0.15% and 0.9%, respectively.
Resource Stocks Performance: Gold and silver stocks saw gains, with CHINAGOLDINTL up 2.8% and JIANGXI COPPER rising 3.0%, while ZIJIN MINING rallied by 2.1%.
Tech Stocks Decline: Major tech companies like TENCENT and BABA-W faced losses of 2.6% and 1.1%, respectively, with significant short selling activity noted across the sector.
Carmakers and Other Stocks: Carmakers BYD and LEAPMOTOR opened lower, while LI AUTO saw a slight increase of 2.2%. CKH HOLDINGS remained flat amid ongoing arbitration actions.
HMO: Panama Court Decision Significantly Erodes Rule of Law and Contract Integrity
Supreme Court Ruling: The Supreme Court of Justice of Panama declared the contracts and regulations of two ports operated by Panama Ports Company unconstitutional, impacting CKH HOLDINGS.
Chinese Government Response: The Hong Kong and Macau Affairs Office criticized the ruling, claiming it undermines the rights of Chinese enterprises and violates principles of rule of law and contract integrity.
CKH Firmly Opposes Panama's Decision and Actions, Plans to Actively Pursue Arbitration Proceedings
Supreme Court Decision: The Supreme Court of Justice of Panama declared Law No. 5 of 16 January 1997 unconstitutional, which has been the basis for Panama Ports Company S.A.'s operations for nearly 30 years.
Impact on Operations: The decision may take effect in early February 2026, and Panama Ports Company (PPC) believes it contradicts the legal framework supporting their concession contract.
Legal Actions: PPC has initiated arbitration proceedings against the Republic of Panama, asserting their rights under the concession contract and the International Chamber of Commerce's arbitration rules.
Company's Stance: The Board of CKH Holdings strongly disagrees with the court's ruling and is consulting legal counsel to explore further national and international legal options.
CKH: Ongoing Functionality of Two Panama Canal Ports Relies Exclusively on Decisions by Panama's Supreme Court and Government
CKH Holdings Dispute with Panama: CKH Holdings has notified Panama of a dispute under an investment protection treaty due to measures affecting its subsidiary, Panama Ports Company S.A. (PPC), following a Supreme Court ruling declaring a key law unconstitutional.
Legal Actions and Operational Uncertainty: CKH is pursuing legal recourse, including arbitration, while facing potential forced exit from port operations at Balboa and Cristobal, with no assurances from the Panamanian State regarding PPC's future operations.
<BofAS Analysis> Ratings and Target Prices for Hong Kong Property Developers and Landlords (Table)
Property Developers Performance: Various property developers showed mixed performance with SHK PPT and Henderson Land rated as neutral, while CK Asset and Sino Land received buy ratings. New World Development was rated underperform.
Landlords Overview: Hysan Development and Swire Properties experienced declines, but all listed landlords, including Wharf REIC and Hang Lung Properties, received buy ratings, indicating positive market sentiment.
REITs Market Status: LINK REIT saw a significant increase in share price and was rated a buy, reflecting optimism in the REIT sector.
Conglomerates Insights: MTR Corporation and CKH Holdings were rated underperform and buy respectively, with short selling activity indicating varying investor confidence in these conglomerates.
HPH Trust Reports 15% Increase in 2025 Profit Attributable to Unitholders, Reaching $748M
CKH Holdings Stock Performance: CKH Holdings (00001.HK) experienced a decline of 1.400 points, or 2.129%, with a short selling volume of $266.01 million and a ratio of 32.551%.
Hutchison Port Holdings Trust Financial Results: Hutchison Port Holdings Trust reported a 2.6% year-over-year increase in revenue and other income to $11.863 billion for the year ending December 2025, with a profit attributable to unitholders of $748 million, reflecting a 15.1% increase.
Distribution Per Unit (DPU) Decline: The final DPU for Hutchison Port Holdings Trust was reported at 6.5 cents, which is a decrease of 9.7% compared to the previous year.
Analyst Downgrade: Daiwa downgraded CKI Holdings (01038.HK) to "Outperform," citing unchanged fundamentals but indicating that positive factors have already been priced in.
HSI Declines by 37 Points; Commodities Maintain Recovery; TENCENT Under Pressure
Market Overview: The HSI opened lower by 0.1% at 26,797, with the HSCEI and HSTECH also experiencing declines of 0.15% and 0.9%, respectively.
Resource Stocks Performance: Gold and silver stocks saw gains, with CHINAGOLDINTL up 2.8% and JIANGXI COPPER rising 3.0%, while ZIJIN MINING rallied by 2.1%.
Tech Stocks Decline: Major tech companies like TENCENT and BABA-W faced losses of 2.6% and 1.1%, respectively, with significant short selling activity noted across the sector.
Carmakers and Other Stocks: Carmakers BYD and LEAPMOTOR opened lower, while LI AUTO saw a slight increase of 2.2%. CKH HOLDINGS remained flat amid ongoing arbitration actions.
HMO: Panama Court Decision Significantly Erodes Rule of Law and Contract Integrity
Supreme Court Ruling: The Supreme Court of Justice of Panama declared the contracts and regulations of two ports operated by Panama Ports Company unconstitutional, impacting CKH HOLDINGS.
Chinese Government Response: The Hong Kong and Macau Affairs Office criticized the ruling, claiming it undermines the rights of Chinese enterprises and violates principles of rule of law and contract integrity.
CKH Firmly Opposes Panama's Decision and Actions, Plans to Actively Pursue Arbitration Proceedings
Supreme Court Decision: The Supreme Court of Justice of Panama declared Law No. 5 of 16 January 1997 unconstitutional, which has been the basis for Panama Ports Company S.A.'s operations for nearly 30 years.
Impact on Operations: The decision may take effect in early February 2026, and Panama Ports Company (PPC) believes it contradicts the legal framework supporting their concession contract.
Legal Actions: PPC has initiated arbitration proceedings against the Republic of Panama, asserting their rights under the concession contract and the International Chamber of Commerce's arbitration rules.
Company's Stance: The Board of CKH Holdings strongly disagrees with the court's ruling and is consulting legal counsel to explore further national and international legal options.
