【CK Asset Holdings 1113 Analysis】See Clearly in One Article: Broker Reviews of CK Asset Holdings Performance - JPMorgan: Large-Scale Reinvestment May Not Happen in the Short Term - Why Did UBS Aggressively Raise Target Price by 13%?

CK Asset Holdings (01113) Last year, pre-revaluation profit from investment properties was HKD 11.96 billion, up 2.7% year-on-year. Shareholders’ profit was HKD 10.84 billion, down 20.6% year-on-year. Brokers expect CK Asset may not pursue large-scale reinvestments in the short term. Whether a special dividend will be paid after the UKPN disposal remains unknown. With a market-to-book ratio of only 0.4 times, there is potential for valuation re-rating.

JPMorgan: CK Asset May Not Make Large Reinvestments in the Short Term

JPMorgan expects that, excluding significant disposal gains, profits in fiscal 2026 and 2027 could face pressure due to reduced property income. If including the HKD 8.4 billion from UKPN disposal, net profit this year could jump 64%, but dividends may not be linked to per-share earnings including major sale gains. Therefore, they expect this year’s dividend to decline by 6% year-on-year. The key question is whether CK Asset will pay a special dividend after completing the UKPN disposal.

“We think there is a possibility (of paying a special dividend), but not a certainty. If a special dividend is paid, the amount may roughly offset the decline in regular dividends, keeping the total payout stable.”

Due to CK Asset’s cautious stance on the global macro outlook, the bank believes the company is unlikely to pursue large-scale reinvestments in the near term, as it appears satisfied with its net cash position. JPM maintains a “Neutral” rating on CK Asset with a target price of HKD 48.5. However, if three conditions are met—(1) an unexpectedly large special dividend, (2) more value-enhancing capital recoveries, or (3) more active investments in Hong Kong residential properties—the outlook for CK Asset would become more positive.

Citi: Maintains “Buy” Rating on CK Asset

Citi notes that amid geopolitical uncertainties, CK Asset’s tone remains cautious. It is still too early to discuss the use of proceeds from the UKPN disposal. CK Asset emphasizes creating long-term value through operations and is willing to unlock business value when opportunities arise. The company views share buybacks as a way to return value to shareholders and will act when appropriate.

Citi expects that, from 2026 to 2028, CK Asset’s earnings per share will benefit from better property sales and the bottoming out of development property profit margins after provisions, supporting stable dividend growth. Citi maintains a “Buy” rating with a slightly raised target price of HKD 54.8, up 0.5%.

UBS: CK Asset Likely to Become a Net Cash Company, Target Price Up 13%

UBS states that CK Asset’s performance last year met expectations, with dividends exceeding forecasts. Management indicated during an analyst meeting that they plan to further unlock value for shareholders, continue share buybacks when opportunities arise, and remain open to capital return opportunities, including potential special dividends after the UKPN disposal. UBS notes that CK Asset’s market-to-book ratio is only 0.4 times, significantly lower than other Hong Kong developers, indicating potential for valuation re-rating.

As of the end of last year, CK Asset’s total net debt was HKD 9.7 billion, with a net leverage ratio of only 2.3%. After the UK Rails and UK Power disposals, which will recover HKD 2.3 billion and HKD 22.2 billion respectively, UBS estimates CK Asset will become a net cash company with about HKD 15 billion in cash. The company also expects to record HKD 617 million and HKD 8.4 billion in profits from UK Rails and UK Power disposals this year.

UBS has raised its target price for CK Asset by about 13% to HKD 62, mainly reflecting the higher net cash position after the UKPN disposal. The bank also revised its earnings forecasts for this year and next, up 31% and down 22% respectively, mainly due to the disposals of UKP and UK Rails, and the latest progress in property development completion.

Goldman Sachs: CK Asset’s Valuation Is Not Expensive, But Lack of Dividend or Buyback Commitments Is Slightly Negative

Goldman Sachs believes CK Asset’s performance last year was below expectations. After updating its property pipeline and realizing gains from UK railway sales, the bank’s EPS forecasts for this year and next remain unchanged and are lowered by 2%, with a 12-month target price of HKD 53. The bank also notes that some investors may expect CK Asset to return some proceeds from sales via dividends or buybacks, but the lack of such commitments could be viewed as slightly negative. Given limited available assets, Goldman Sachs still considers CK Asset to have relatively low leverage compared to peers in the Hong Kong residential market. Currently, CK Asset’s valuation is not expensive, with a forecasted 2026 P/B ratio of 0.4 times and a dividend yield of 4.1%, in line with industry averages. Goldman Sachs maintains a “Neutral” rating on CK Asset, favoring New World Development (00016), Henderson Land (00012), and Sino Land (00083), all rated “Buy.”