JP Morgan: CKH Holdings (00001) port transaction progressing smoothly, maintains "buy" rating.

J.P. Morgan released a research report stating that CKH Holdings (00001) recorded solid growth in core businesses in the first half of the year, with a year-on-year increase of 11% in underlying profit and a 3% increase in interim dividends. The EBITDA of the port, retail, infrastructure, and telecommunications businesses increased by 10%, 12%, 6%, and 12% respectively. Management revealed that progress in the port asset transaction is smooth, and although it is expected to be completed by next year at the earliest, it emphasized that the transaction has entered a new stage of introducing Chinese strategic investors, and believes there is a reasonable possibility that the transaction will be approved. However, J.P. Morgan warned that the current price level of CKH Holdings already reflects the market's expectations for approval of the port transaction. Considering the increased certainty of business growth, the bank raised its target price from HK$54 to HK$58 and maintained a "buy" rating. J.P. Morgan also expects that even if CKH Holdings completes the port transaction, it may only allocate about 10% to 20% of the proceeds for special dividends. As of the end of June, CKH Holdings' net debt-to-equity ratio declined from 16.2% at the end of last year to 14.7%, and management indicated a preference to use funds for value-added European infrastructure project acquisitions, but will maintain a cautious financial policy amid geopolitical uncertainty.