CTF Services Limited

FY2025 AOP increased 7% year on year to about HKD 4.5 billion. Adjusted EBITDA increased 1% to HKD 7.3 billion, and profit attributable to shareholders increased 4% to HKD 2.2 billion. The board approved a final ordinary dividend of HKD 0.35 per share, unchanged from last year; with the interim ordinary dividend of HKD 0.30 and a one-off interim special dividend of HKD 0.30, total FY2025 dividend was HKD 0.95 per share. Cash on hand was HKD 20.2 billion, undrawn committed bank facilities were HKD 9.6 billion, net debt was HKD 14.7 billion, and net gearing was 37%; net debt to adjusted EBITDA was 2x. Average borrowing cost fell to 4.1% from 4.7% in FY2024, with RMB debt at 62% of total debt, RMB liabilities to assets at almost 80%, and fixed-rate debt at about 70%. Segment AOP: Roads HKD 1.4 billion, down 8%; Financial Services HKD 1.24 billion, up 29%; Logistics HKD 740 million, up 3%; Construction HKD 790 million; Facility Management HKD 89 million; Strategic Investment HKD 237 million, up over 1,000%. Management said the ordinary dividend represented about 50% of operating cash flow, leaving room for reinvestment. Looking ahead, they expect refinancing of most debt due within 12 months to be completed before December 2025, and they reiterated a 40% to 45% target gearing ratio near to medium term.

The CEO framed FY2025 as a stable year and emphasized that the group is actively redefining its business portfolio through acquisitions, disposals, rebranding, and capital-market moves. He highlighted a strategic push into financial services and wealth management, saying the group wants to leverage the Chow Tai Fook brand and network to cross-sell insurance, brokerage, and external asset management products. He also stressed portfolio discipline, saying the group will not invest in toll roads blindly and will pursue acquisitions only where returns make sense.

The CFO focused on cash generation, capital structure, and funding flexibility. He cited HKD 20.2 billion of cash, HKD 9.6 billion of undrawn facilities, HKD 14.7 billion of net debt, 37% net gearing, and a 2x net debt-to-adjusted-EBITDA ratio, and said the move toward RMB borrowing reduced average borrowing cost to 4.1% from 4.7% in FY2024. He also noted the debt maturity profile, saying about HKD 9.4 billion, or 27% of gross debt, matures in the next 12 months and most refinancing is expected before December 2025. On capital returns and liquidity, he said the group has paid dividends for 22 consecutive years, kept the ordinary DPS at HKD 0.65 for the year, and used bonus shares and convertible bonds to improve liquidity and restore free float.

Analysts pressed management on whether the toll-road portfolio could be sold, how the remaining concession life affects the business, and whether road investments would continue. Management said there is no immediate plan to dispose of the whole portfolio, but selective disposals are possible if pricing is attractive; they also said they will only expand or modify roads if the returns justify it, and noted the next major expiry is the Hanzhou Ring Road in 2029. Questions also focused on the dividend policy after the 1-for-10 bonus issue: management said the absolute dividend amount will not be lowered, but the future DPS after bonus shares is still under discussion. On financial services synergies, management said the goal is to build an internal wealth-management ecosystem across CTF Life, uSmart, and Blackhorn, using CTF Life’s policyholder base as a cross-sell channel, though they did not quantify near-term accretion.