UBS Reaffirms 'Buy' Rating and HK$62 Price Target for CK ASSET

Deep News07-12 15:51

UBS has released a research report reiterating its "Buy" rating and a HK$62 price target for CK ASSET (01113).

Core Earnings Forecast

The bank anticipates that CK ASSET's cash earnings for the first half of 2026, excluding gains from disposals, will remain largely stable. Within this, earnings before interest and tax (EBIT) from property development are expected to see a slight increase. Rental income from Hong Kong is projected to decline slightly, but this is forecast to be offset by growth in rental income from overseas public housing. Additionally, rising room rates are expected to support the profit contribution from the hotel business. In contrast, the EBIT contributions from the infrastructure business and the UK pub operator Greene King are anticipated to decline, influenced by recent asset sales and rising costs.

Dividend Expectations

The report further states that, to reflect the substantial disposal gain from UKPN (amounting to HK$8.4 billion), UBS expects CK ASSET to announce a special dividend of HK$0.39 to HK$0.82 per share for the first half of 2026. This would imply a payout ratio of 16% to 34%. Considering the bank's forecast for an organic full-year 2026 dividend per share of HK$1.78, which is expected to be broadly flat, the total dividend yield is projected to reach between 5% and 6%.

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Within this, earnings before interest and tax (EBIT) from property development are expected to see a slight increase. Rental income from Hong Kong is projected to decline slightly, but this is forecast to be offset by growth in rental income from overseas public housing. Additionally, rising room rates are expected to support the profit contribution from the hotel business. In contrast, the EBIT contributions from the infrastructure business and the UK pub operator Greene King are anticipated to decline, influenced by recent asset sales and rising costs.\nDividend Expectations\nThe report further states that, to reflect the substantial disposal gain from UKPN (amounting to HK$8.4 billion), UBS expects CK ASSET to announce a special dividend of HK$0.39 to HK$0.82 per share for the first half of 2026. This would imply a payout ratio of 16% to 34%. 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