CKHUY - CK Hutchison: Tower Asset Divestment And Capital Allocation In The Spotlight

• CK Hutchison recently announced that it is selling certain tower assets for EUR10 billion, which is equivalent to 44% and 15% of its market capitalization and enterprise value, respectively.
• CK Hutchison has multiple options to allocate its cash proceeds from the divestment of its tower assets; I will favor share buybacks, special dividends and deleveraging over acquisitions.
• The company trades at 6.3 times consensus forward FY 2021 P/E and 0.45 times P/B, and it offers a consensus forward FY 2021 dividend yield of 5.0%.

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