Citigroup: CKH Holdings (00001) diversified business portfolio helps stabilize growth. Adding a short-term bullish view of 90 days with a target price of HKD 78.

Citibank released a research report stating that CKH HOLDINGS (00001) profits in 2025 are expected to increase by 7% compared to the previous year. They once again remind investors that their business portfolio is highly diversified in terms of geography and industry, which helps to reduce inherent systemic risks and cope with market fluctuations. Looking ahead, management expects port throughput to slow down due to geopolitical tensions, but the stable profit growth in retail and infrastructure businesses should offset this potential risk. They have set a target price of HKD 78 and recommend a "buy" rating. The bank stated that CKH HOLDINGS' performance in 2025 generally met expectations, with a net profit of HKD 11.841 billion, a 31% decrease compared to the previous year. However, if we add back the one-time non-cash loss of HKD 10.469 billion due to the Vodafone Three merger, the basic profit is HKD 22.31 billion, a 7% increase year-on-year, which is roughly in line with the bank's forecast of HKD 22.798 billion. Citibank quoted management as stating that CKH HOLDINGS' strategy has always been to unlock asset value while strengthening its financial position, believing this is the best way to enhance shareholder returns. The company will effectively recycle capital and focus on long-term, resilient businesses. With the advancement and application of artificial intelligence, management believes that scalable businesses can benefit from cost synergies and productivity improvements, which are also key considerations for potential mergers and acquisitions. In addition, the group's total throughput in the Middle East accounts for less than 0.5%, and the total number of retail stores is around 0.2%. To reflect the 2025 financial performance, the latest operational trends, and exchange rates, Citibank has adjusted down the group's profit forecasts for the next two years by 3% to 5%. They have also introduced profit forecasts for the 2028 fiscal year and added a 90-day short-term bullish view on CKH HOLDINGS, suggesting that if any potential mergers or acquisitions in their port, retail, and telecommunications businesses are finalized, it could unlock asset value and narrow the discount on net asset value.