Zhi Tong Cai Jing·2026-01-20 01:27Core Viewpoint - UBS reports that the performance of Hong Kong composite enterprises' stock prices will diverge in 2025, driven mainly by asset sales and capital recovery activities, with investors shifting to valuing companies based on price-to-book ratios rather than dividend yields [1] Group 1: Company Ratings and Price Targets - UBS prefers Cheung Kong (00001) and Swire Properties A (00019) among the covered stocks, with a "Buy" rating for Cheung Kong and a target price of HKD 58.8, raised from USD 83.4 and HKD 67 [1] - For Swire, UBS assigns a "Neutral" rating, lowering the target price from HKD 74 to HKD 72.7 [1] Group 2: Financial Projections - UBS anticipates Cheung Kong's basic net profit will grow by 3% year-on-year in 2025, a slowdown from the 11% growth seen in the first half of last year, with expected EBITDA growth in the port and retail sectors to decelerate in the second half [1] - UBS estimates Swire's recurring basic earnings will increase by 9.1% year-on-year to HKD 10.1 billion, with a projected 5% rise in the final dividend [1] Group 3: Asset Management and Valuation - UBS believes potential asset sales and possible spin-off plans could help Cheung Kong narrow its current 47% discount to net asset value, indicating that the current valuation is attractive [1] - Unlike Cheung Kong and Jardine Matheson, UBS sees limited room for corporate actions for Swire but expects continued improvement in its balance sheet this year, benefiting from growth in its real estate business [1]