CK Asset (former Cheung Kong Property) 1113

[winston]

not vested

CK Asset Holdings
Quick View

Target Price*HK$ 49.8
Recomendation**BUY
Market Cap*HK$ 154,183m

Profile

CK Asset Holdings (CKAH) was the property arm of the Cheung Kong Group. The company was spun off as CK Property in 2015 and renamed as CK Asset Holdings in 2017.

Within the property business, CKAH develops residential properties for sale, holds investment properties for rental, and operates hotels.

CKAH also owns c. 32%, 27%, and 18% stakes in Huxian REIT, Fortune REIT, and Prosperity REIT respectively.

In the non-property business, CKAH has investments in aircraft leasing, brewery/pubs, and a portfolio of utilities/infrastructure companies to generate recurring income.

Key Statistics
Dec HK$ m 2019 2020f 2021f
Revenue 82,382 49,517 58,905
Net Profit 28,729 17,717 20,791
Profit Gth (%) 27 (40) 17
PE (X) 5.4 8.7 7.4
Div Yield (%) 5 3.4 3.9
Disc. to NAV (%) na (62) (62)
Source: DBS Group Research (At the time of publication)

Recent Developments
16 Feb 2021CK Asset Holdings - 21 Borrett Road fetches record price
1 Feb 2021CK Asset Holdings - Eyes on dividends
7 Aug 2020CK Asset Holdings: Saving bullets for acquisition
5 Aug 2020CK Asset Holdings: Interim result preview
20 Aug 2019Enhanced and diversified earnings profile
2 Aug 2019Quality play in these uncertain times
22 Mar 2019Capital recycling bearing fruit

Our Views
BUY with HK$49.8 TP. The stock is trading at 62% discount to our appraised current NAV. Valuation is by no means expensive.

The Li family continues to raise its stake in the company, casting a vote of confidence over its long-term future.

Investors, however, are keeping an eye on the dividend outlook, following the interim dividend cut. This would dictate the share price performance in the near term

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... 113_HK.xml

[winston]

vested

<Research Report>HSBC Research Raises CK ASSET (01113.HK) TP to $50.6, Rated Buy

CK ASSET (01113.HK) won the bidding for the Kai Tak Area 4E Site 2 residential site at $10.28 billion, representing a floor price of about $15,860 per sq.ft., reported HSBC Global Research.

The consideration was at the upper end of street forecasts.

The group was kept at Buy, with target ramped up from $50.4 to $50.6.

Source: AAStocks Financial News

[winston]

vested

Writ withdrawal in sight for Goldin case

CK Asset Holdings Limited today clarified that the writ against Gold Brilliant Investment Limited and the chairman of Goldin Financial Holdings Limited Pan Sutong “is probably a misunderstanding”, believing the matter could be resolved in the next few days with the writ withdrawn.

CK Asset Holdings Limited today responded to media enquiries saying that the writ is to “remind the concerned to adhere to the signed agreement”, adding that once the matter is resolved, the company will have the writ withdrawn.

Tycoon Li Ka-shing’s CK Asset Holdings, last year, had provided HK$8.7 billion in funding for the cash-strapped developer.

The developer previously has also seen the departure of a Li Ka-shing-linked executive - Gerald Ma Lai-chee, who had been seen as part of a bail-out program for the financially troubled firm.

Ma, who has served with Li family companies for 24 years, had joined Goldin’s board in late July last year, after the cash-strapped firm revealed that it was in the process of arranging the HK$8.7 billion in fresh financing.

Source: The Standard

https://www.thestandard.com.hk/breaking ... oldin-case

[winston]

not vested

CK Asset Holdings (1113 HK)
2020: In Line With Expectations; Proposed M&A Using Equity May Dilute Shares

2020 underlying profit of HK$19,339m (-32.5% yoy) is in line with our expectation.

Management raised the dividend payout ratio by 4ppt to 34% which was a positive
surprise and suggests an optimistic outlook.

CKA announced a proposal to acquire interests in infrastructure assets from LKSF using equity, which may dilute shares.

However, the short-term share price impact should be positive.

Maintain BUY with a target price of HK$55.33.

Source: UOBKH

https://research.uobkayhian.com/content ... 567e1d201e

[winston]

not vested

Mutually beneficial transaction

CK Asset’s FY20 core profit was down 32% to HK$19.3bn, 17% above our estimate on higher property sales booking and lower tax provision.

We think the latest acquisition not only enhances its DPS but is also positive for its share price, as it offers minority shareholders price of HK$51.

Meanwhile, CK Asset appears to be positive on the HK property market as it replenished two residential sites in Hong Kong in 2020.

Upgrade to Add with a higher TP of HK$53.8 (45% discount to NAV).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 134CB2FCD3

[winston]

not vested

BUY with HK$60 TP.

The stock is trading at 56% discount to our appraised current net asset value (NAV).

The proposed acquisition of utility assets from Li Ka Shing Foundation (LKSF) should enhance its recurring earnings base, while the share buy-back offer provides a floor to CK Asset Holdings’ (CKAH) share price.

BUY with higher target price (TP) of HK$60.

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... 113_HK.xml

[winston]

not vested

BUY with HK$60 TP.

The stock is trading at 56% discount to our appraised current net asset value (NAV).

The proposed acquisition of utility assets from Li Ka Shing Foundation (LKSF) should enhance its recurring earnings base, while the share buy-back offer provides a floor to CK Asset Holdings’ (CKAH) share price.

BUY with higher target price (TP) of HK$60.

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... 113_HK.xml

[winston]

not vested

Cheung Kong Asset Holding (1113.HK) Rising exposure to recurring business
Maintain OUTPERFORM Target price (HK$): 65.00 (from 61.60)

CKAH's 1H21 underlying profit declined 8% YoY to HK$7,661 mn, mainly on lack of booking in HK.

This represented 36% of our FY21 full-year estimates (vs 43% achieved in 1H20).

The interim DPS increased 20.6% YoY to HK$0.41, equivalent to ~20% of its guaranteed full-year DPS (HK$2.07).

Despite the lacklustre property leasing (-9% YoY), its investment in infrastructure and utility projects further diversified the income stream.

The profit from recurring business increased 27% YoY in 1H21 with profit contribution rising to 43% (vs 34% in 1H20).

We fine-tune our FY21-22E earnings and introduce FY23E.

We trim our NAV estimate by 3% but narrow NAV discount to 40% (vs 45% previously) amid the improving operating environment.

We lift our TP to HK$65.00 (from HK$61.60). We like CKAH's rising exposure to recurring business. Maintain OUTPERFORM.

Source: CS

[winston]

not vested

CK Asset Holdings Limited
Speeding up capital recycling

CK Asset (CKA) reported a 10% yoy increase in underlying profit in FY21, with a 22% yoy increase in DPS supported by newly-acquired assets.

Having secured a few asset disposals in the past six months, we think CKA will engage in more landbanking in HK and a new round of share buyback.

Reiterate Add with an unchanged TP of HK$58.1 (45% discount to NAV).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... A136394F11

[winston]

not vested

CK Asset Holdings (1113 HK): Pleasant dividend surprise [BUY, TP HK$63.20]

FY21 net profit grew 30% to HK$21.2bn, ahead of our estimate, due to stronger-than-expected development profit

Final DPS jumped 23% to HK$1.79, a positive surprise

Turning into net cash following the recent sale of aircraft leasing business and 5 Broadgate

BUY with HK$63.20 TP

Source: DBS