Morgan Stanley: CKH HOLDINGS' capital cycle reconstruction is positive

Reports indicate that CKH HOLDINGS (00001.HK) is in discussions with Jardine Matheson to sell its Hong Kong supermarket business "ParknShop." Morgan Stanley published a research report stating that this move reflects CKH HOLDINGS' ongoing capital recycling, which is positive for the company. If Jardine Matheson's DFI Retail Group's "Wellcome" (which has 320 stores) merges with CKH HOLDINGS' "ParknShop" (which has 240 stores), together they will occupy 80% of the Hong Kong supermarket market share.

The report mentions that for CKH HOLDINGS, the Hong Kong market is classified under the "Other" category in retail business. This segment recorded revenue of HKD 22.5 billion and EBIT of HKD 167 million in 2025, showing improvement compared to a loss of HKD 86 million in 2024. Looking back to 2013, before CKH HOLDINGS sold its stake in Watsons to Temasek, the company had planned to list or sell ParknShop, with a potential valuation reported at USD 3 billion to 4 billion.

The bank pointed out that CKH HOLDINGS' valuation is attractive, predicting a price-to-earnings ratio of 10 times and a dividend yield of 3.6%. If potential transactions in ports, retail, and telecommunications can be realized quickly, it will further enhance its investment value. Morgan Stanley has given CKH HOLDINGS an "Overweight" rating with a target price of HKD 61