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Cheung Kong Infrastructure (Hong Kong stock code 1038) bucked HSI’s 0.58% down, was up 0.67% at HK$44.90 on Friday, adding to its 3.4% gain Thursday after the company said its 1H11 net profit nearly doubled on-year to HK$3.98 billion from HK$2.03 billion.

Morgan Stanley says the upbeat results were due to a stronger-than-expected performance from UK Power Networks. The house now projects that annual earnings from UK Power Networks could reach HK$2.9 billion, up from its original expectation of HK$2.3 billion. “We note, however, that even on this basis, the stock looks fully valued.” It raises its target to HK$46.10 from HK$40.82, after it raises its FY11 EPS forecast to HK$3.35 from HK$3.24. Despite strong earnings growth in 2011, it expects CKI to pay 2011 dividend/share of only HK$1.46, or 10% higher than 2010. Dividend yield on this basis is only 3.3%, lower than that of CLP’s (Hong Kong stock code 0002) 3.5% and Power Assets’ (Hong Kong stock code 0006) 3.5%, it adds. It keeps CKI at Equalweight.

Goldman Sachs raised its target price for Cheung Kong Infrastructure to HK$46 from HK$45.1, and maintained its “neutral” call. It said CKI’s core net profit was broadly in line. Goldman raised CKI’s 2011-13 EPS by 0-5% factoring in forex/disposal gain and recent currency movements. The stock is fairly valued, trading at 13.3x 2011 P/E, in line with its historical average, the house said.

BNP Paribas raises Cheung Kong Infrastructure’s target to HK$49.30 vs HK$46.80, as the house revises up its net profit forecasts by 2%-3% for 2011-2013, after the infrastructure investment firm reported that first-half net profit nearly doubled Thursday. The house says the strong earnings were supported by a better-than-expected performance of UK Power Network which the company acquired in October 2010. It expects UKPN to be the key earnings driver for CKI going forward, on the back of surging CPI in U.K. and potential cost-saving. It adds, UKPN demonstrates CKI’s solid skills in picking M&A targets and believes it has good potential to secure more earnings accretive deals in 2011. However it notes the company may need to raise funds in the equity market to fund possible acquisitions, which may impact its share price negatively.

Citigroup raises its FY11-FY13 EPS forecast by 3%-9% and raises its target to HK$50 from HK$45. “Despite share price rally, CKI is inexpensive at 12.1X FY12 P/E, the lowest among HK utilities.” Aggregated liquidity from recent share placement in July has helped narrow the valuation discount,

JP Morgan raises Tsingtao Brewery (Hong Kong stock code 0168) target to HK$44.50 from HK$40.00, after rolling over its valuation-base period to December 2012. “While we agree that due to its brand and positioning, Tsingtao deserves some premium over smaller staples peers, given our expectation of 17.5% earnings CAGR post 2012, we would be cautious on the name if valuations stretch further.” For FY11, the house is looking for 19% top-line growth and 20% earnings growth driven by a 13% increase in volumes, 5% average selling price increase and a slight improvement in margins due to financial income. It keeps the stock at Neutral. The stock is down 0.6% at HK$49.40 in late afternoon session.

China Shipping Container Lines (Hong Kong stock code 2866.HK) rebounds 1.4% to HK$2.20 after falling 6.9% Thursday after it warns it will swing to a 1H11 net loss vs a 1H10 net profit of CNY1.09 billion. Goldman Sachs says market may have over-reacted, as 1H loss “should not come as a surprise,” given that the carrier was loss-making in 1Q11 to the tune of CNY146 million on a post-exceptional basis. As freight rates worsened in 2Q, losses were to be expected, and “in our view, were reflected in valuations.” The house forecasts CSCL will end the year “slightly profitable,” assuming a belated peak season in 4Q. It keeps the stock at Buy with a HK$2.75 target.

Hutchison Whampoa’s 1H results are due Aug. 4. Goldman Sachs forecasts a headline net profit of HK$49.8 billion; if excluding the HPHT IPO gain, EBIT and core earnings are projected to grow 22% and 56% on-year to HK$20 billion and HK$7.8 billion, driven by CKI, retail (+20% on-year) and energy (+45% on-year). The house expects “a modest improvement” in 3G EBIT from HK$0.2 billion in 2H10 to HK$0.8 billion in 1H11, dragged by subscriber loss in Australia due to dropped calls on saturated network post its merger with Vodafone, though offset by continued growth in 3UK and 3Italia on smartphone take-up.

Li & Fung (Hong Kong stock code 0494) dropped 3.94% at HK$13.18 midday, on top of a 3.9% fall Thursday which came on news it’s cutting 40 Hong Kong-based jobs focusing on European operations. The move may suggest a challenging operating environment for the supply chain manager, perhaps due to a combination of revenue headwind and cost pressures. Still, analysts aren’t reading too much into the layoffs news; “it’s been a long-term initiative to move jobs to lower-cost destinations,” says one analyst. Li & Fung’s intraday low of HK$13.02 marks a 52-week low.

Xingda International (Hong Kong stock code 01899) said its wholly-owned subsidiary Faith Maple entered into an agreement with Guang Rao Hong Kai Investment and Guang Rao Hong Yuan Investment for the formation of a joint venture named Shandong Xingda Steel Tyre Cord. The JV will be owned as to 51% by Faith Maple, 24.5% by Hong Kai and 24.5% by Hong Yuan. The total investment amount and the registered capital of the JV are US$219 million and US$75 million, of which the amount to be contributed by Faith Maple to the JV will not be more than US$182.7 million. The joint venture will be principally engaged in the production and sale of radial tyre cords and hose wires, and the distribution, import and export of self-produced products and products of the same type.