A Goldman Sachs research report indicated that CKH HOLDINGS (00001) delivered 2025 results that aligned with expectations. After excluding a one-time loss of HKD 10.5 billion related to the merger of 3UK and Vodafone UK, the company's underlying net profit reached HKD 22.3 billion, marking a 7% year-on-year increase, which was in line with the bank's and market forecasts. Calculated in local currencies, the group's EBITDA grew by 7% year-on-year, with all business segments demonstrating stable performance. The group declared a final dividend of HKD 1.6, bringing the full-year dividend to HKD 2.3, a 5% increase from the previous year, while the payout ratio remained stable at approximately 40%.
The report noted that CKH HOLDINGS' net debt to net capital ratio improved further from 16.2% at the end of 2024 to 13.9% at the end of 2025, representing its strongest level since 2001. Factoring in the cash proceeds from the sale of the UK rail business and the proposed sale of UKPN by CK Infrastructure, the net debt ratio is estimated to decline further to 7%.
In light of the Middle East conflict and geopolitical risks, CKH HOLDINGS' management maintained a cautious outlook on business prospects during the analyst meeting. However, they anticipate that the port business can mitigate impacts through diversification within its global portfolio. Amid macroeconomic uncertainties, they expect global trade growth to slow down.
Regarding the telecommunications segment, the primary focus is on integrating the 3UK and Vodafone operations. The company is on track to achieve the targeted GBP 700 million in annual cost and capital expenditure synergies by the fifth year post-merger. Management also indicated they are exploring new services in energy, insurance, fixed wireless access, and travel eSIM to drive future growth.
Considering trends observed year-to-date, the gains from the sale of the UK rail business by CK Infrastructure, and updated forecasts for its core operations, Goldman Sachs raised its earnings per share forecast for CKH HOLDINGS by 11% for the current year, while maintaining the forecast for the following year unchanged. The bank also introduced a forecast for 2028.
For the entire group, Goldman Sachs predicts that CKH HOLDINGS' core profit for the 2026 fiscal year will increase by 16% year-on-year to HKD 25.9 billion. This growth is expected to be primarily driven by the gradual realization of synergies from the UK telecom merger in the European operations and benefits for the Canadian energy company Cenovus Energy from rising oil prices.
A sensitivity analysis by Goldman Sachs estimates that for every USD 1 increase in oil prices, CKH HOLDINGS' profit would rise by approximately HKD 300 million, or 1% to 2%. No rating was assigned to CKH HOLDINGS.