HK Stock Market Move | CKI Holdings (01038) is now up more than 4%, with robust free cash flow expected to bring even better returns to shareholders.

CKI Holdings (01038) is now up more than 4%, rising to 4.17% as of the time of publication, at 55 Hong Kong dollars, with a turnover of 2.4 billion Hong Kong dollars. HSBC released a research report stating that the Hong Kong utilities sector has shown strong resilience against market fluctuations. They recommend CK Infrastructure as their top pick in the Hong Kong utilities sector, as its stable free cash flow is expected to bring better shareholder returns, and they anticipate stronger M&A value potential by 2026. Morningstar previously stated that they raised the fair value of CKI Holdings by 3% to 65 Hong Kong dollars, benefiting from a slight increase in profit expectations. The stock is currently undervalued, with a forecasted P/E ratio of 15 times and a dividend yield of 4.8%, with a stable mid-term outlook. Morningstar predicts a compounded annual earnings growth of 6.3% over the next five years, as regulated returns are expected to increase to reflect the significant rise in capital costs since the last adjustment.