Analysis | Why Hong Kong tycoon Li Ka-shing is setting his sights outside the region

Li Ka-shing’s strategy to reinvest his lofty returns from Hong Kong and mainland China property investments into stable cash-generating assets in western developed countries is a long known open secret.

Even when property and land prices were not as high in Hong Kong and the mainland two years ago as they are now, Li said the firm was finding it a challenge to identify property investments “with reasonable returns”.

This amounted to 54 per cent of the HK$190 billion that Li’s companies have spent in the past six years on infrastructure and energy investments, according to a tally by the South China Morning Post of the publicly announced deals.

“It is a reflection of risk aversion; what Li’s companies have been trying to achieve is slowly exiting from Hong Kong and China assets, especially cyclical assets like properties, and putting the money into businesses that provide more stable cashflows in markets outside this region,” UBS head of Asian utilities research, Simon Powell told the Post.

Li, one of Asia’s richest men, said in his chairman statement on CKP’s interim results filing on Thursday that the company had “a firm commitment to establishing a strong recurring income base” through “globalisation and diversification initiatives”.