Investment Rating - The report assigns a "Collect" rating to CK Infrastructure Holdings, with a target price of HKD 60.35 based on a 17x PE for 2026 [3]. Core Insights - CK Infrastructure Holdings demonstrates stable business performance, with an expected increase in project return rates during the new regulatory period [2][31]. - The company is actively expanding sustainable development projects in the UK and Australia, including smart grid solutions and electric vehicle charging infrastructure [2]. - The financial forecasts predict net profits of HKD 85.97 billion, HKD 89.38 billion, and HKD 92.69 billion for 2025, 2026, and 2027 respectively, reflecting a growth trend [3][5]. Business Performance Summary - For the first half of 2025, the company reported stable performance across various segments, with contributions from Electric Power Industry Limited increasing by 1% year-on-year to HKD 1.095 billion [4][11]. - The UK operations contributed HKD 2.223 billion, a 19% increase year-on-year, primarily due to the performance of Northumbrian Water and several gas networks [4][11]. - The Australian infrastructure business saw a decline of 8% in profit contribution to HKD 793 million, attributed to currency fluctuations and the expiration of profitable contracts [4][11]. - The company’s financial foundation remains strong, with cash holdings of HKD 47 billion and a net debt to total capital ratio of 10.6% [14][15]. Regulatory Period Insights - The new regulatory period starting April 1, 2026, is expected to enhance return rates for UK operations, with Northumbrian Water and Wales & West Utilities receiving proposals for increased returns [4][31]. - In Australia, significant regulatory resets are anticipated in 2025, with SA Power Networks commencing a new regulatory period on July 1, 2025, which is expected to allow for increased returns and asset base growth [4][34]. Dividend Information - The interim dividend for 2025 is set at HKD 0.73 per share, marking a 1.4% increase year-on-year, continuing a 28-year streak of dividend growth since the company's listing [4][11].