Citi: Cheung Kong's performance in the first half is stable, target price raised to HK$89.

Citi published a research report indicating that CK Hutchison's performance in the first half of the year was robust, with net profit increasing more than 30 times year-on-year to over HKD 26.8 billion. Excluding one-off items and the UK telecommunications business, core profit grew by 7% year-on-year to HKD 12.581 billion, reaching approximately 56% of the bank's full-year profit forecast. They believe that CK Hutchison benefits from its diversified business advantages in the current challenging operating environment. Benefiting from the sale of stakes in the UK rail and UK power grid, the group's net debt-to-net total capital ratio fell to a historic low of 8.1% during the period. The completion of the sale of a 49% stake in Vodafone Three in July this year further generated GBP 4.3 billion in cash, and Citi believes that CK Hutchison's debt ratio could decline further. However, they express slight disappointment over the lack of clear explanations on how to deploy the accumulated cash, maintaining a NAV discount of about 49%. With valuation extending to 2027, the NAV was adjusted from HKD 150.44 to HKD 175, and the target price was raised from HKD 81.50 to HKD 89, maintaining a "Buy" rating.