UBS lists CKH HOLDINGS and SWIRE PACIFIC as preferred integrated companies

UBS published a research report indicating that the performance of Hong Kong's composite corporate stock prices will be differentiated in 2025, primarily driven by asset sales and capital recovery activities. It believes that investors have shifted to valuing companies based on price-to-book ratios rather than dividend yields. In the coming year, the bank expects that a reduction in Federal Reserve interest rates may further promote asset sales, with a preference for Jardine Matheson (JARD.SI), CKH HOLDINGS (00001.HK), and Swire Pacific (00019.HK) among the covered stocks.

UBS has given Jardine Matheson and CKH HOLDINGS a "Buy" rating, raising their target prices from USD 72.6 and HKD 58.8 to USD 83.4 and HKD 67, respectively. For Swire Pacific, UBS has assigned a "Neutral" rating, lowering the target price from HKD 74 to HKD 72.7.

The bank stated that potential asset sales and possible spin-off plans may help CKH HOLDINGS narrow its current 47% discount to net asset value, believing that the current price valuation is attractive. It currently forecasts that the company's basic net profit for 2025 will grow by 3% year-on-year, a slowdown from the 11% growth in the first half of last year, and estimates that EBITDA growth for the port and retail businesses will slow in the second half of the year.

UBS estimates that Swire Pacific's recurring basic earnings will grow by 9.1% year-on-year to HKD 10.1 billion in 2025, with the final dividend expected to increase by 5% year-on-year. Unlike CKH HOLDINGS and Jardine Matheson, the bank believes that Swire Pacific may have limited room for corporate actions but expects that the balance sheet from last year will continue to improve this year, benefiting from growth in real estate business profits