Daiwa Downgrades CKI Holdings to "Outperform" Citing Limited Upside as Positive Factors Already Priced In

Daiwa released a research report stating that, considering positive factors such as regulatory resets and the sale of the UK rail business are already reflected in the share price of CK Hutchison Holdings (00001), it believes the fundamentals remain unchanged but further upside is limited. Additionally, with the dividend yield now close to industry peers, the rating was downgraded from "Buy" to "Outperform," while the target price was raised from HK$63.5 to HK$66.3.

Last week, CK Hutchison was ruled by the Panama Supreme Court to have its port concession contracts unconstitutional, leading to a decline in the share prices of both CK Hutchison and CKI HOLDINGS (01038). The report suggests the ruling likely stems from Sino-US tensions over strategic assets and could disrupt CK Hutchison's planned sale of its global port business to BlackRock.

For CKI HOLDINGS, the report views the event as creating sentiment pressure, as it highlights the risk of political scrutiny. However, it does not directly impact CKI's profit foundation, as the company's business is primarily concentrated in regulated utilities in the UK and Australia.