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On Friday, HSBC analyst Raymond (NSE:RYMD) Liu downgraded CK Asset Holdings stock from Buy to Hold, adjusting the price target to HK$32.90, a decrease from the previous HK$44.60. The revision follows CK Asset’s reported fiscal year 2024 results, which showed a 15% year-over-year decline in net profit to HK$11.7 billion. This drop was largely attributed to provisions in the property business and asset impairment in pub operations.
The company also adjusted its full-year dividend per share (DPS) to HKD1.74, mirroring the decline in net profit. Liu noted that initial expectations for the sales performance of CK Asset’s high-end project in Beijing were overly optimistic. Additionally, the rate of new business acquisition, which was anticipated to enhance the company’s earnings profile, may not meet prior expectations.
The analyst expressed concerns about the low visibility on the turnaround of CK Asset’s business due to weak margins in its property sales business. Liu also mentioned the possibility of a further DPS cut in 2025, which could negatively affect the share price despite the stock’s attractive valuation. The downgrade to Hold reflects these concerns and the revised outlook for the company’s financial performance.
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