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<Research>Citi Views CKI Sale of UKPN Positively; Attractive Pricing
Recommend 10 Positive 17 Negative 4 |
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Citi Research's report recaptured that CKI HOLDINGS (01038.HK), POWER ASSETS (00006.HK), and CK ASSET (01113.HK) sealed a deal to sell their entire stake in UK Power Networks (UKPN) to the listed French utility company jointly held by them, Engie, for GBP10.548 billion (approximately HKD110.754 billion). CKI HOLDINGS (01038.HK) was expected to record a disposal gain of HKD14.5 billion, while PAH will log HKD10.7 billion. Citi viewed the transaction positively, noting the considerable disposal gain. Since CKI's cash yield from UKPN in 2024 was only 3.6%, the disposal would not sharply reduce its recurring cash inflows, Citi said. The sale price was considered attractive, equivalent to 1.6x of the GBP9.2 billion RAB by end 2025. Based on Citi's calculations, this was also equivalent to 12x 2025E EV/EBITDA, providing "ammunition" for potential future M&As. Citi rated CKI and PAH as Buy, while maintaining a Neutral on CKA. AASTOCKS Financial News Website: www.aastocks.com |
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