Bank of America Securities: CKH Holdings' UK Telecom Divestiture Strengthens Financial Position, Buy Rating Maintained

Stock News
May 06

Bank of America Securities issued a report stating that CKH HOLDINGS (00001) has agreed to sell its 49% stake in the UK mobile telecom operator VodafoneThree for £4.3 billion in cash (approximately HK$45.5 billion). This further demonstrates the company's willingness to unlock value through asset monetization. Although the sale price is about 10% lower than the bank's more optimistic valuation, the transaction significantly strengthens CKH HOLDINGS' balance sheet and enhances its financial flexibility amid macroeconomic uncertainty. The bank considers CKH HOLDINGS' valuation attractive and maintains a "Buy" rating with a target price of HK$75. CKH HOLDINGS expects to record a disposal gain of HK$4.7 billion upon completion of the transaction, which is targeted for the second half of 2026. This gain is considerable relative to the bank's core profit forecast of HK$23.1 billion for the 2026 fiscal year. Furthermore, as the joint venture has been recording losses due to increased depreciation and amortization, the sale should also boost recurring earnings in the near term. In the seven months since the merger of Vodafone UK and Three UK created VodafoneThree in 2025, CKH HOLDINGS' share of the net loss has reached HK$519 million.

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