not vested
CK Hutchison Holdings Limited (0001.HK) 1H21 in-line; core business recovery on track in 2H Maintain OUTPERFORM Target price (HK$): 77.00 (from 74.00)
Ports and retail both rebounded strongly from last year on economic activities starting to normalise as the reopen started.
However, 3 Europe was negatively impacted by increased competition in Italy and higher D&A from a higher asset base from significant investment in IT and 5G rollouts. Infrastructure remained steady.
The result was also helped by the one-off gain from disposal of the tower asset as well as FX tailwinds.
In 2H, we see the core business staying on a recovery path, while the FX tailwind may also continue.
Ports should continue to benefit from recovery of trade flows, while retail business may see uncertainty from COVID resurgence, yet the impact should be manageable.
We revise 2021/22E earnings by 6%/-4% to factor in latest business updates.
The current valuation is attractive at 6x 2021E P/E, with a 5.5% dividend yield. Maintain OUTPERFORM rating and lift TP to HK$77 (from HK$74).
Source: CS