Citigroup has issued a research report stating that CKI HOLDINGS (01038), Power Assets Holdings (00006), and CK Asset Holdings (01113) have reached an agreement to sell their entire stake in UK Power Networks (UKPN), a UK electricity distributor, to the listed French utility company Engie for £10.548 billion (approximately HK$110.754 billion).

The sale is expected to generate a gain of approximately HK$14.5 billion for CKI HOLDINGS and HK$10.7 billion for Power Assets Holdings. Citigroup views the transaction positively, as it delivers substantial disposal gains.

According to Citigroup, the sale will not significantly reduce CKI HOLDINGS' recurring cash flow, as the cash yield from UKPN in 2024 was only 3.6%.

The bank also considers the sale price attractive, representing 1.6 times the regulated asset value of £9.2 billion as of the end of last year. Based on Citigroup's calculations, the price also corresponds to an enterprise value-to-EBITDA multiple of approximately 12 times last year's figures and provides "ammunition" for potential future acquisitions.

Citigroup maintains a "Buy" rating for both CKI HOLDINGS and Power Assets Holdings, while it rates CK Asset Holdings as "Neutral."