Daiwa released a Research Report stating that it maintains a "Buy" rating for CKI HOLDINGS (01038), with the Target Price reduced from HKD 63 to HKD 59. The firm stated that the recent decline in CKI HOLDINGS' stock price may be due to the controversy surrounding the parent company CKH HOLDINGS (00001) selling its Panama port business. However, the firm believes that CKI's stock price has already overcorrected, and the current valuation is attractive with a yield of 5.4% and optimistic dividend growth prospects.
Daiwa mentioned that CKI submitted a non-binding offer for the financially troubled Thames Water in the United Kingdom. Given the group's successful experience in improving operations, it is believed that it is very likely to win the bid. Although CKI has incentives to issue new shares in the United Kingdom to improve share liquidity, according to management, this is not an ideal choice due to CKI's recent stock price being undervalued. If the group completes the Thames Water transaction or gains operational rights to turn around the business, it is believed that it will alleviate market concerns about political intervention.
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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