CK Infrastructure's (1038) potential sale of UK Power Network is seen to be attractive in terms of price and risk reduction.
Analysts from Citi expect CK Infrastructure could benefit from a disposal gain equal to HK$11.33, or 22.5 percent of its share price if 100 percent of the stake is sold. And CK Infrastructure could also benefit from return rest risk from the upcoming return reset of UK Power Network effective on April 1, 2023.
The potential special dividend to the shareholders is a favorable factor as well.
Citi has assigned a buy rating on CK Infrastructure and a price target of HK$54.
UK Power Networks is controlled by a group of companies - CK Infrastructure, Power Assets (0006) and CK Asset (1113) - all owned by the family of Hong Kong tycoon Victor Li, who is also the top shareholder in conglomerate CK Hutchison (0001).
