Zhi Tong Cai Jing·2026-03-20 21:04Core Viewpoint - Goldman Sachs maintains a "neutral" relative rating on Cheung Kong Infrastructure Holdings (01038), adjusting profit forecasts for 2026 and 2027 based on recent business trends and realized gains from the sale of UK rail assets [2] Group 1: Financial Performance - Cheung Kong Infrastructure's profit attributable to shareholders for 2025 is projected at HKD 8.3 billion, with core earnings (excluding one-off items) expected to grow by 6% year-on-year to HKD 8.5 billion, aligning with Goldman Sachs' expectations [2] - Contributions from Europe and New Zealand significantly boosted performance, with Europe showing a year-on-year increase of 58% to HKD 1 billion, and New Zealand up 8% to HKD 200 million [2] Group 2: Strategic Moves - The proposed sale of UKPN to Engie for GBP 10.5 billion is expected to allow the company to realize investments, confirming an accounting gain of HKD 14.5 billion and cash proceeds of HKD 45 billion [3] - Following the transaction, Cheung Kong Infrastructure anticipates holding over HKD 30 billion in net cash, assuming the cash proceeds are received [3] Group 3: Market Performance and Valuation - The stock price of Cheung Kong Infrastructure has risen 13% year-to-date, potentially benefiting from favorable currency movements and market expectations of profit recovery post-regulatory reset [3] - The stock appears reasonably valued with a projected price-to-earnings ratio of 15 times for 2026 and a dividend yield of 4.1%, compared to a 4.2% yield on 10-year U.S. Treasury bonds [3]