Bank of America Securities: CKH Holdings (00001) sells UK telecommunications business to enhance financial flexibility, maintains "buy" rating.

Bank of America Securities released a research report stating that CKH HOLDINGS (00001) has agreed to sell its 49% stake in the UK mobile telecom operator VodafoneThree for 4.3 billion pounds in cash (approximately 45.5 billion Hong Kong dollars), further demonstrating CKH HOLDINGS' willingness to unlock value through asset monetization. Although the selling price is about 10% lower than the bank's optimistic valuation, this transaction significantly strengthens CKH HOLDINGS' balance sheet and enhances financial flexibility in the face of macroeconomic uncertainties. The bank believes that CKH HOLDINGS' valuation is attractive and maintains a "buy" rating with a target price of 75 Hong Kong dollars. CKH HOLDINGS expects to record a profit of 4.7 billion Hong Kong dollars after the completion of the transaction, with the goal set for the second half of 2026. This profit is quite substantial compared to the bank's core profit forecast of 23.1 billion Hong Kong dollars for the 2026 fiscal year. Additionally, as the joint venture recorded losses due to increased depreciation and amortization, this sale should also increase recurring profits in the short term. In the seven months since Vodafone UK and Three UK merged to form VodafoneThree in 2025, CKH HOLDINGS' share of net losses amounted to 519 million Hong Kong dollars.