Lyon: Maintains a "outperform" rating on CTF SERVICES (00659) with a target price of HKD 8.2.

Lyon released a research report stating that CTF SERVICES (00659) maintains an "outperform" rating and a target price of HK$8.2, believing that CTF SERVICES' stock price is at a 42% discount to its net assets. Lyon pointed out that CTF SERVICES announced good mid-term performance, with the company's recurring profit estimated to increase by 11% year-on-year, benefiting from the Asia Container Logistics Center and CHOW TAI FOOK Life Operating Health. The company also announced a special dividend of HK$0.3 per share as a positive surprise. Lyon still sees room for dividend growth, with the assumption that the company can still distribute an additional special dividend of HK$0.4 per share, with the equity-to-net debt ratio rising from 39% to 45%. The company's target equity-to-net debt ratio is 40% to 45%, up from 39% in December. Lyon estimates that with the leverage, the ratio could rise to 45%, allowing for an additional special dividend of HK$0.4 per share, representing a 5.2% extra dividend. Lyon estimates that the company, excluding CHOW TAI FOOK Life, will have a recurring free cash flow of HK$8.1 billion from 2025 to 2027, enough to support gradual dividend payments, with a total estimated dividend payout of HK$8 billion.