Cheung Kong Property Price Target Lifted 9%: Offers 15% Upside
By Robert Guy
Brokerage CIMB has lifted its price target on Hong Kong's Cheung Kong Property Holdings (1113.HK) by 9% after the acquisition of Australian utility DUET.
The acquisition of a 40% stake in Duet, combined with other previous acquisitions like aircraft leasing, could lift recurring income from HKD8.6 billion in 2016 to between HKD10 billion to HKD12 billion for the 2017 to 2019 financial years.
Cheung Kong Property's share price has been supported by a buyback. The company has bought HKD5 billion of stock year-to-date, which accounts for around a third of daily trading volume.
We revise up our FY17-19F core profit by 4.5-9.8% after factoring in Duet’s contribution and the share buyback YTD.
We raise our TP to HK$66 with a narrower discount to NAV of 40% (45% previously) to reflect the better sentiment in the Central office market.
CKP is currently trading at a 48% discount to NAV, which is attractive, in our view.
Source: Barron's Asia
http://www.barrons.com/articles/cheung- ... 1494921151