[ET Net News Agency, 26 February 2021] Daiwa Research lifted its target price for CK
Infrastructure Holdings (CKI) (01038) to HK$50 from HK$48 and maintained its "buy" rating.
The research house said sees CKI in a sweet spot thanks to its nature of
inflation-linked regulated earnings as well as the strengthening of the AUD and GBP, given
a weak USD under the ongoing accommodative fiscal and monetary policies.
Daiwa said CKI received several direct blows from the pandemic in 1H 2020, including (1)
a HK$443m COVID-19 cost impact, (2) a HK$1,400m non-cash loss on the UK government's
cancellation of a corporate tax rate cut from 19% to 17%, and (3) a weak AUD and GBP.
Yet, Daiwa also sees a major turnaround in 2021 on a weak USD under the accommodative
fiscal and monetary policies in the US. Not only are some of CKI's overseas regulated
return projects inflation-linked, the 7% appreciation in the GBP/HKD and 12% appreciation
in the AUD/HKD both year-to-date benefiting CKI's second-largest business segments, on top
of a potential reversal of COVID-19 cost impact bookings. (KL)