Citigroup: New 90-day short-term bullish view on CKH, target price of HK$78

Citigroup has released a research report stating that CK Hutchison's performance in 2025 is roughly in line with expectations, with a net profit of HK$11.841 billion, a year-on-year decrease of 31%. However, if the one-time non-cash loss of HK$10.469 billion generated by the VodafoneThree merger is added back, the basic profit is HK$22.31 billion, a year-on-year increase of 7%, roughly in line with the bank's forecast of HK$22.798 billion. Looking ahead, management expects that port throughput will slow down due to geopolitical tensions, but stable profit growth in retail and infrastructure businesses should offset this potential risk. In order to reflect the 2025 financial performance, the latest operating trends, and the latest exchange rates, Citigroup has lowered its profit forecast for the group for the next two years by 3% to 5%. In addition, they have introduced profit forecasts for the 2028 financial year; added a short-term bullish view on CK Hutchison for the next 90 days, stating that if any potential merger transactions in its port, retail, and telecom businesses are ultimately completed, it could release asset value and narrow the discount on net asset value; and set a target price of HK$78 with a "buy" rating.