JP Morgan believes that CKH Holdings (00001) is still attractive in the industry.
Smart Finance App learned that JPMorgan released a research report stating that although CKH Holdings (00001) EBITDA increased by 5% year-on-year in the first half of the year, core earnings per share and dividend per share both fell by 9%, slightly lower than the bank's expectations, but this is mainly due to one-off income and lower taxes. The report maintains its "shareholding" rating with a target price of HK$50.
The bank expects moderate growth in earnings per share and dividend per share for the full year, and most businesses are expected to maintain year-on-year improvements except for its retail trade in mainland China and Hong Kong. Looking at its annualized free cash flow yield of 11% and dividend yield of 6.3%, they believe CKH Holdings is still attractive in the industry. In the past year, CKH's stock price has outperformed the Hang Seng Index by 4%, mainly benefiting from its resilient business and low exposure to mainland China/Hong Kong.
The report pointed out that although CKH bought back stocks actively in 2021 and 2022, the company has not bought back any stocks since then. Although the management stated that they think the current stock price is attractive during the performance announcement, the group prefers to be conservative financially. The bank believes that CKH may not conduct major buybacks in the short term unless the stock price falls significantly.