UBS: It is expected that CKH Holdings (00001) may benefit from rising oil prices, while Taikoo A (00019) may be negatively affected.

UBS released a research report stating that the geopolitical conflict in the Middle East has caused macroeconomic uncertainty, making the risk-return profile of Hong Kong conglomerates more sensitive to external factors. The bank assumes that the Middle East conflict will continue unresolved until the end of the third quarter of this year, with limited oil tanker traffic through the Strait of Hormuz, and an average Brent crude oil price of $132.5 per barrel for the year. UBS has set a target price of HK$67 and a "Buy" rating for CKH HOLDINGS (00001), while Swire Pacific Limited (00019) receives a "Neutral" rating with a target price of HK$72.7. The bank estimated that the net asset value and potential earnings of CKH HOLDINGS could increase by 9% and 66% by 2026, mainly due to the uplift in oil prices for its subsidiary Cenovus Energy. On the other hand, the net asset value and potential earnings for Swire Pacific Limited could decrease by 19% and 26% respectively by 2026, as its subsidiary Cathay Pacific Airways (00293) faces pressure from rising fuel costs.