UBS: It is reported that CKI HOLDINGS (01038) and others are seeking to sell Australian energy companies. Maintain the target price of CKH HOLDINGS (00001) at HKD 101 and the "Buy" rating.

UBS published a research report stating that it maintains a target price of HKD 101 for CKH HOLDINGS (00001) and a "Buy" rating. The firm noted that according to Australian media Australian Financial Review, CKH HOLDINGS subsidiary CKI HOLDINGS (01038), which holds a 76% stake, has commissioned Morgan Stanley and Barclays to initiate the sale of its stake in Australian sustainable distribution energy producer EDL Energy (of which CKH HOLDINGS has a 36% effective stake), with a valuation estimated between AUD 2 billion and 3 billion. The report indicated that EDL Energy primarily engages in clean and renewable electricity, renewable natural gas, and remote renewable energy businesses, with major clients including Glencore and Rio Tinto. The firm estimates that the proceeds from this transaction could account for 1.4-2.1% of CKH HOLDINGS' market value. Assuming no losses or gains from the sale, if sold within the aforementioned valuation range, CKH HOLDINGS' net debt ratio is expected to decrease by 2 percentage points. If the transaction is successful, this will be the third sale of a jointly invested infrastructure project by the CK Infrastructure, CK ASSET (00001), and POWER ASSETS (00006) consortiums, following their earlier sale of the UK power network company UK Power Networks and the UK rail company UK Rails earlier this year.