UBS: Raised CKH HOLDINGS (00001) target price to HK$84.6, rated as "buy", market undervalued Cenovus contribution.

UBS released a research report stating that CKH HOLDINGS (00001) still has attractive risk-return profile, with the target price raised by 26% from the original 67 Hong Kong dollars to 84.6 Hong Kong dollars. The assumption of a 45% discount to the Net Asset Value (NAV) is maintained, and the "Buy" rating is also maintained. The bank believes that the market may be underestimating CKH HOLDINGS' profit potential from the recent surge in oil prices due to its earnings from Cenovus Energy, as well as the profits from recent asset sales. UBS pointed out that Cenovus' first-quarter profit increased by 83% year-on-year, and oil prices remained high in April. Additionally, the expected sale of UKPN and VodafoneThree transactions are expected to bring in profits of 14.5 billion Hong Kong dollars and 4.7 billion Hong Kong dollars respectively for CKH HOLDINGS, with the profits expected to be realized in the second half of 2026. The bank has factored in these factors as well as Cenovus' profit contribution into its forecast, and has raised the basic profit forecasts for CKH HOLDINGS for the years 2026-2028 by 95%, 7%, and 2% respectively, and has raised the dividend per share forecasts for 2026 and 2027 by 32% and 6% respectively. Although CKH HOLDINGS' stock price has risen by 32% this year, its current valuation is equivalent to a forecast Price-to-Book ratio of 0.44 times for 2026, still below the historical average of 0.49 times.