According to a research report from CLSA, Hong Kong conglomerates continue to be regarded by equity investors as high-quality dividend safe havens, featuring resilient asset portfolios and rising dividends.

The brokerage maintained its earnings forecasts, ratings, and target prices unchanged, noting that the sector currently trades at a 37% discount to net asset value (versus a long-term average of 30%), with CK Hutchison Holdings Ltd (ASX: 00001) and CTF Services Ltd (ASX: 00659) remaining its top picks.

The report noted that investor interest remains concentrated on family-owned enterprises, with attention on the next round of catalysts and their timelines.

Investors broadly agree that Hong Kong conglomerates are good dividend safe havens and are not heavily held by investors; amid elevated uncertainty, investors appreciate the resilient asset portfolios across the conglomerates covered by the brokerage.

Based on the brokerage's currently published forecasts, the combined recurring profit and cash dividends for Hong Kong conglomerates in 2026 are expected to grow 6% and 9% year-on-year respectively, to US$8 billion and US$4.2 billion, with CK Hutchison Holdings Ltd (ASX: 00001) and Swire Pacific Ltd (ASX: 00019) serving as the two main drivers.

The brokerage stated that the conglomerates most discussed with investors were CK Hutchison Holdings Ltd (ASX: 00001), Jardine Matheson, and First Pacific Co Ltd (ASX: 00142).

Under high oil prices, Cenovus Energy will support CK Hutchison's earnings growth, while property and non-property businesses underpin Swire Pacific's forecast recurring profit growth for 2026 and 2027; regarding Jardine Matheson and First Pacific, although investors are not enthusiastic about Indonesia, they agree that both possess quality assets and attractive equity valuations.

On CK Hutchison, investors have few objections to the brokerage's thesis but are focused on the timelines of multiple potential transactions, including the port sale first announced in March 2025; in the absence of catalysts, the brokerage prefers shares with steadily rising dividends.

For MTR Corporation Ltd (ASX: 00066), the brokerage continues to see risks of dividend cuts or equity financing due to elevated future capital expenditure (guided at HK$84.8 billion for 2026 to 2028).

In terms of ratings, all are positive except for MTR Corporation Ltd (ASX: 00066), which is rated "Hold." CK Hutchison Holdings Ltd (ASX: 00001) is rated "High Conviction Outperform" with a target price of HK$110; CTF Services Ltd (ASX: 00659) is rated "Outperform" with a target price of HK$11.5, offering a sustainable dividend yield of 7.6% per year at the current price; Swire Pacific Ltd (ASX: 00019) and First Pacific Co Ltd (ASX: 00142) are each rated "Outperform" with target prices of HK$114 and HK$6.8 respectively; MTR Corporation Ltd (ASX: 00066) has a target price of HK$33.