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<Research>Citi Tweaks Up CK ASSET's TP to HKD54.8, Anticipates Better Profit Margins This Yr
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CK ASSET (01113.HK)'s FY25 core profit grew by 2.3% YoY to HKD12 billion and dividend per share rose by 2.3% YoY to HKD1.78, according to a Citi research report. Remaining cautious amid geopolitical uncertainties, CK ASSET's management considers it premature to discuss the use of proceeds from the sale of UK Power Networks (UKPN) at this stage. CK ASSET also emphasized creating long-term value through operations and being open to unlocking business value. It will seize opportunities to launch share buybacks, as they are a way to return value to its shareholders. In Citi's opinion, CK ASSET is poised to achieve higher contract sales in 2026 (compared to HKD10 billion in 2025) and better profit margins (with a 4.2% operating profit margin for Hong Kong development properties in 2025), mainly benefiting from (1) price increases, (2) optimizing launch timing to maximize returns, and (3) an estimated pipeline of saleable resources exceeding HKD18 billion. After adequate provisioning, the broker expects development property profit margins to gradually recover. Citi has kept a Buy rating on CK ASSET and lifted its target price from HKD54.55 to HKD54.8. AAStocks Financial News |
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