Citi released a report indicating that Bloomberg reported CHOW TAI FOOK (00659.HK) may sell its toll road project for 2 billion USD. Although there has been no official announcement, the bank estimates that based on the profit forecast for the toll road project over the next year, the transaction valuation is at a PE of 10.6 times for the coming year, which is higher than the industry average of 7.8 to 9.8 times. If the 2 billion USD price is confirmed, it will increase CHOW TAI FOOK's projected NAV for the fiscal year 2026 by about 7%. CHOW TAI FOOK currently has a stock price that discounts NAV by 42%.

The bank also noted that if its affiliate NEW WORLD DEV (00017.HK) defaults on its debt, the impact on CHOW TAI FOOK's earnings and balance sheet will be manageable. CHOW TAI FOOK currently holds two batches of Bonds from NEW WORLD DEV, and under a full impairment scenario, it could lead to a 4% to 5% reduction in CHOW TAI FOOK's recurring profits, with the fair value of the approximately 1.1 billion HKD worth of Bonds held being about 3.5% of the company's current Market Cap.

The bank currently maintains a "buy" rating for CHOW TAI FOOK with a Target Price of 8.6 HKD, based on its 9% dividend.