"Big Banks" UBS: Selling UK Power Networks is slightly positive for CKH HOLDINGS, rating "Buy"

UBS published a research report stating that CK Hutchison Holdings (00001.HK) subsidiary CK Infrastructure (01038.HK) and Power Assets Holdings (00006.HK) will sell their respective 40% stakes in UK Power Networks to French utility company Engie, with a total equity consideration of £10.5 billion.

The bank expects CK Hutchison to recognize HKD 14.5 billion in attributable effective earnings, while also forecasting that CK Hutchison's net debt ratio will decrease from 18.5% on June 2025 to 11.7%. The bank believes that the sale of UK Power Networks is beneficial for CK Infrastructure, increasing its per-share valuation by HKD 3.7, with a 1.4% impact on CK Hutchison's stock price conversion.

The bank indicated that the group has not recently considered distributing a special dividend; instead, it prefers to reallocate funds through potential new acquisitions. The bank maintains a "Buy" rating on CK Hutchison, with a target price of HKD 67