Lyon: Reiterate CKI HOLDINGS (01038) "outperform" rating, target price raised to 62 Hong Kong dollars.

Lyon released a research report stating that the final regulatory outcome of Northumbrian Water, a water and wastewater treatment company in the UK, was better than expected, eliminating pressure from CKI HOLDINGS (01038) resetting. This is a positive signal, indicating that regulatory authorities intend to set sufficient regulatory returns in the current high interest rate environment to attract necessary utility project investments. Considering the improved profit outlook, the bank has raised its long-term target price from 60 Hong Kong dollars to 62 Hong Kong dollars, reiterating its "outperform the market" rating. Lyon stated that considering the positive impact of Northumbrian Water, the bank has raised its profit forecast for the 2025 to 2026 fiscal years by 2% to 3%, but the weakening of the pound/Australian dollar exchange rate will partially offset the aforementioned positive impact. The bank points out that it has a more positive view on Longjian among utility companies in Hong Kong/China mainland, rather than distributor CHINA GAS HOLD, because Longjian has diversified international business that can generate stable cash flow and continuously increase dividends.