CK Hutchison Reports Strong Ports and Non-China Retail but Weak Telecom; FVE Cut to HKD 74

CK Hutchison’s 2022 result was solid at a consolidated level, with reported revenue increasing by 3%, net profit increasing by 10% and the dividend up 10% to HKD 2.93. After accounting for one-offs (mainly asset sales and impairment charges) underlying EBITDA was flat in reported currency terms and up 7% in local currency terms. Telecom was again the key disappointing segment, but this was largely offset by strength in ports and retail outside of China. As such, we nudged our fair value estimate down to HKD 74 from HKD 75. CKH remains relatively attractive as a value play but its telco segment struggles are an overhang in the absence of further consolidation in Europe. Nonetheless, CKH’s share price should find support as it trades on an attractive dividend yield of over 5% currently, coupled with an active share buyback policy.