Citigroup: initiates a "buy" rating on CTF SERVICES (00659) riding the tailwind of Hong Kong insurance industry growth.

Citi released a research report stating that it is initiating coverage on CTF SERVICES (00659) for the first time with a "buy" rating and a target price of 10.6 Hong Kong dollars. They believe that the company has a consistent and stable dividend policy (with a dividend yield of about 7% in the 26th year); achieved strong annual revenue growth through CHOW TAI FOOK Life; and a positive capital cycle, which they are optimistic about for the company. Citi believes that since the stock became eligible for the Shanghai-Hong Kong Stock Connect, its trading liquidity has significantly improved, and it should be of interest to more investors. They also believe that the growth prospects of dividends and the insurance business can cushion downside risks and are attractive to investors. They further stated that the management of CTF SERVICES continues to engage in capital recycling. The management disclosed that in the first half of fiscal year 2026, they have already obtained over 300 million Hong Kong dollars from the divestment of non-core assets, which could potentially bring in another 3 to 4 billion Hong Kong dollars in future sales. The bank expects that the recent acquisition of logistics properties will contribute to an increase in the company's attributable operating profit this year.