JP Morgan: Panama Port Ruling Has Limited Impact, Reiterates "Overweight" Rating for CKH Holdings (00001)

J.P. Morgan's research report stated that, from a fundamental perspective, they believe CKH HOLDINGS is entering a moderate profit recovery track, with a compound annual growth rate of 4% over the next three years. They maintain a "hold" rating with a target price of HKD 68. Last Friday (30th), the stock price fell by 4.6% due to the Panama Supreme Court ruling that CKH HOLDINGS' concession rights at the ports in Panama are unconstitutional. Since discussions about this issue have been ongoing since early 2025, J.P. Morgan believes that the outcome is not surprising and the impact is limited, as these two ports contribute less than 1% of CKH HOLDINGS' EBITDA. Although the news headline may seem negative, the bank believes that this may not necessarily disrupt the HKD 110 billion global port divestment plan. In fact, these two ports in Panama are the most politically sensitive part of the global port divestment plan, and if Panama were to withdraw, it may actually make it easier for various parties including the Blackstone Group and the governments of China and the United States to reach a consensus on the terms. The final form or scale of the divestment plan may differ from the original plan, for example, the ports may be sold separately to different buyers instead of a single consortium. Indeed, gaining approval from all parties remains a challenge, but even without the port divestment, CKH HOLDINGS is exploring other ways to unlock value, including potential divestment of its retail business and listing its telecommunications business.