CKH Allegedly Engages G Sachs and UBS for A.S. Watson Group's IPO

The analyst rating for CKH HOLDINGS (00001.HK) was reiterated as Buy by BofA Securities for several reasons: 1. Normalization of Valuation: The target price was raised by 9% to $62, reflecting the normalization of the valuation of its retail business. 2. Enhanced Net Asset Value: There is an enhancement in the net asset value of its subsidiary, AS Watson (ASW). 3. Attractive Valuation: The current valuation shows a 54% discount to net asset value, which is considered attractive. 4. Optimism About Value Unlocking: The broker expressed optimism regarding CKH HOLDINGS' willingness to take actions that can unlock value. 5. Risk Assessment: Although there are uncertainties related to the proposed disposal of its port business, the risks have been adequately reflected in media reports, suggesting that the market has already priced in these uncertainties. Overall, these factors contributed to the positive outlook and Buy rating for the company.

The analyst rating from the article is based on several key factors: 1. Catalysts for Growth: The year 2026 is expected to be filled with catalysts for Hong Kong conglomerates, particularly for CTF SERVICES, Jardines, and FIRST PACIFIC, which suggests potential for significant stock performance. 2. Dividend Compensation: Investors are anticipated to be well compensated through dividends while waiting for these catalysts. The expectation of a 5% growth in recurring earnings for the sector, along with a projected 3% year-over-year increase in sector dividends, supports this view. 3. Risk-Reward Profiles: CLSA identifies CTF SERVICES and CKH HOLDINGS as top picks due to their attractive risk-reward profiles, indicating that these stocks are expected to perform well relative to their risk. 4. Target Prices: The broker has set specific target prices for the stocks, with CTF SERVICES at $8.8 and CKH HOLDINGS at $61, both rated at Outperform, which reflects a positive outlook on their future performance. 5. Overall Sector Outlook: The combination of expected earnings growth, stable dividends, and favorable market conditions (like a weak USD) contributes to a positive overall outlook for the sector, reinforcing the analyst's ratings. These factors collectively lead to the recommendation to invest in the highlighted stocks.

The analyst rating for CKH Holdings is based on several key factors: 1. Demerger Plans: CKH is planning to demerge its retail business, AS Watson, for a dual listing in Hong Kong and the UK, which is expected to raise approximately USD2 billion. This strategic move is seen as a way to unlock value from its unlisted businesses. 2. Strong Performance of Retail Business: The retail segment is performing well, with an EBITDA of about USD1 billion in the first half of 2025, reflecting a year-over-year growth of 12.5%. This strong performance supports the potential for value creation through the demerger. 3. Market Valuation: The report highlights that the market currently assigns an implied valuation of zero to CKH's unlisted businesses, including ports, retail, and telecom. The expectation is that listing or selling these assets will unlock significant value. 4. Positive Stock Outlook: The stock price is anticipated to outperform the market over the next 60 days, leading to a target price set at HKD61 and an Overweight rating from the analyst. Overall, the combination of strategic demerger plans, strong business performance, and the potential to unlock value from unlisted assets contributes to the positive analyst rating for CKH Holdings.

The analyst rating for CKH HOLDINGS was influenced by several key factors highlighted in the article. Firstly, the company delivered remarkable operational performance across all business segments in the first half of 2025. Additionally, there are ongoing discussions with major strategic investors in China regarding the sale of port assets, which is expected to be mutually beneficial, although the completion of this deal may take time due to regulatory complexities. Furthermore, Citi raised its net asset value (NAV) forecast for CKH HOLDINGS from HKD118.31 to HKD138.69 per share, taking into account the potential sale of port assets and the revaluation of all listed subsidiaries at market price. As a result, the broker increased its target price for CKH HOLDINGS from HKD53 to HKD61, while maintaining a Buy rating, reflecting a 56% discount to NAV. These factors collectively contributed to the positive analyst rating.