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Investing.com - CK Infrastructure Holdings Ltd (HKG:1038) received an Overweight rating initiation from Barclays on Friday, with a price target of GBP6.20, representing over 20% upside potential.
The rating is primarily supported by CKI’s strong market positions in the UK and Australia, which account for approximately 59% and 24% of the company’s equity valuation, respectively. Barclays notes that investors in the London listing gain access to high-quality regulated utility assets, particularly in the UK.
Barclays forecasts regulated capital value (RCV) growth of approximately 5% through 2030, with expectations that growth will accelerate as the utility industry enters what the firm describes as an "investment supercycle." This cycle will be led by power transmission, followed by water, power distribution, and gas distribution sectors.
The firm projects strong cash generation for CKI, with moderate growth leading to higher cash flow and company deleveraging. Barclays estimates the company has significant capacity to increase dividend distribution, forecasting approximately 5% compound annual growth rate in dividends through 2030.
Barclays also highlighted CKI’s track record of operational excellence, noting that assets like NWG, UKPN, and Australian distribution operations rank toward the top end of performance metrics, which should result in above-normal returns on assets and enable them to trade at a premium to replacement cost value.
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