Recap: Li Ka-shing’s CK Hutchison and CK Property top annual profit estimates
Welcome to SCMP’s live blog of the 2015 results of CK Hutchison Holdings (CKH) and Cheung Kong Property (CK Property), the two flagship companies owned by Hong Kong billionaire Li Ka-shing. This is the first time for the two companies to reveal full-year earnings after Li reshuffled his business empire early last year.
Here is a summary of what has happened so far:
- CK Hutchison posts an adjusted net profit of HK$31.2 billion for 2015, above the consensus HK$31 billion estimate in a Reuters poll of analysts
- Cheung Kong Property saw its 2015 net profit increase 0.26 per cent to HK$17.11 billion, beating market estimates of a net income of HK$16.07 billion
- Shares of CK Hutchison close down 0.35 per cent at HK$98.75 before the result announcements
- Shares of Cheung Kong Property end up 1.27 per cent at HK$47.80 ahead of the earnings
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5:50 pm: Eric Ng
Why didn’t Power Assets declare special dividends when it announced annual results this week? Why did it say it will wait for the annual general meeting in two months before it decides to pay special dividends?
Canning Fok, an executive at CK Hutchison, said: “Power Assets is looking at some potential investment opportunities, so we want to give it some more time.”
Victor Li said: “If we pay a special dividend now, it means the company may have less investment opportunity as it cash pile will be reduced. “
5:45 pm: Eric Ng
What do you think of Hong Kong’s localism movement?
Li Ka-shing: “Hong Kong has been a part of China since ancient times. If you are a young person, your future wife may be from Inner Mongolia or northeast China. Nowadays there is not really much local identity anymore. One country is one country. “
5:45 pm: Eric Ng
Do you have any tips for share investors?
Li Ka-shing: “I am no stock speculator. One should look at a company’s net asset value. One should be careful if a firm’s share price exceeds its NAV (net asset value) by a lot. Also if the PE (price/earnings) ratio is too high, one should also be cautious. Shares investment is a risky business. I don’t speculate on stocks. ”
5:40 pm: Peggy Sito
Is China going to change the principal of “One Country, Two Systems”, under which it governs Hong Kong?
Li Ka-shing: “Premier Li Ke-qiang has repeated ‘One Country, Two Systems’. He did not have to repeatedly say that if they wanted to make a change.”
5:35 pm: Peggy Sito
What’s your take on the Hong Kong bookseller incident?
Li Ka-shing: “They (the central government officials) have explained the issue many times. I reckon they have given a very clear explanation.”
5:30 pm: Peggy Sito
What’s your company’s dividend payout policy?
Li Ka-shing: “Last year I said we would increase divided payout. In 2016, I hope I can increase dividend payout barring unexpected circumstances, such as an unexpected slowing of Hong Kong and global economies .”
5:29 pm: Peggy Sito
Commenting on the devaluation pressures facing China’s renminbi, Li Ka-shing said: “With such a big foreign reserves (in China) and such a big economy , speculators can’t successfully attack the Chinese currency.”
5:20 pm: Peggy Sito
What’s your read on mainland property markets?
Li Ka-shing: “I do not feel there is a risk of property bubble in mainland’s first-tier cities . One or two projects in Shenzhen probably saw prices up significantly, but overall we do not see a sharp rise.”
“In China, we (Cheung Kong [roperty) have never sold a bare land site. We sold after properties were built.”
“For example, Oriental Plaza in Beijing is a prime property. We will never sell it. The central governments policies are only aimed at de-stocking inventories.”
5:15 pm: Eric Ng
Will home price fall further in Hong Kong?
Li Ka-shing: “Home construction costs in Hong Kong have already surpassed land prices. Given falling property prices, those who bought (properties) last year would have incurred losses. ”
5:15 pm: Eric Ng
What’s the outlook of oil prices?
Li Ka-shing: “Many oil producing nations need oil price to be over US$100 a barrel for their government budgets to (reach a) balance. I believe oil price should recover somewhat from current levels in the next while. ”
5:11 pm: Eric Ng and Peggy
When talking about Hong Kong’s relationship with mainland China, Li said:
“I personally, like most Hong Kong people, do not like the idea of independence from the mainland. The idea of independence appears quite far-fetched from reality.”
“If Hong Kong did not have China’s support, I believe the HSI (Hang Seng Index) would (have) dropped at least 50 per cent from the current level. I believe the central government always wants to Hong Kong to go well.”
5:11 pm: Eric Ng
Li also said the reason why they closed some mainland supermarkets of Park&Shop is that “rents on the mainland have been rising several-fold”.
“In Hong Kong, we are talking about rent rise in percentage term, but on the mainland you are talking about several-fold,” he said.
5:10 pm: Eric Ng
Li Ka-shing said: “All of our property developer peers are financially healthy and (they are) not under pressure to dump inventory in the market.”
5:06 pm: Peggy Sito
When asked to comment on Hong Kong Chief Executive CY Leung’s performance, Li Ka shing said: “(He) is trying hard (for Hong Kong).”
“No matter what political parties you belong to, what political views you have, do not do anything that will harm Hong Kong further . Hong Kong in some aspects is already lagging behind.”
4:59 pm: Peggy Sito
Victor Li, deputy chairman of CK Hutchison, said:
“You never get a perfect timing to go into property market. But looking back, 90 per cent of home buyers gained profit over the past few decades.”
4:50 pm: Eric Ng
Is Britain going to exit the EU?
Li Ka-shing said: “I am confident that Britain will stay in the EU. If it leaves the EU, we will be more cautious and reduce our investment in Britain.”
4:48 pm: Eric Ng
Is there any plan for further potential restructuring?
“Due to our company’s big operating scale, there may be room for improvement. It is possible, but I don’t have much to add,” Li Ka-shing said.
4:35 pm: Peggy Sito
When asked about Moody’s recent downgrade of Hong Kong’s outlook, Li Ka-shing said Hong Kong government is financially sound with big reserves and Moody’s should carefully assess its credit measures.
4:21 pm: Sandy Li
CK Hutchison, the conglomerate that houses tycoon Li Ka-shing’s non-property assets, recorded an adjusted net income of HK$31.2 billion for 2015 after a reshuffle of Li’s business empire earlier last year.
The result is slightly above the consensus forecast of HK$31 billion in a poll of analysts by Thomson Reuters.
4:20 pm: Enoch Yiu
Cheung Kong Property Holdings, Hong Kong’s second-largest developer, posted a 0.26 per cent increase in its net profit for 2015.
Net profit was HK$17.11 billion in the twelve months ended December, the company said on Thursday in its annual report . The number beat an estimated profit of HK$16.07 billion in a analyst survey by Thomson Reuters.
4:20 pm: Laura He
Shares of CK Hutchison Holdings closed 0.35 per cent lower at HK$98.75, while Cheung Kong Property Holdings ended up 1.27 per cent at HK$47.80.
3:55 pm: Laura He
CK Hutchison was slightly lower ahead of its earnings, down 0.3 per cent at HK$98.85 at 3:47 pm. However, Cheung Kong Property Holdings advanced 1.5 per cent to trade at HK$47.85.
3:39 pm: Enoch Yiu
Consensus forecasts on the 2015 results of CK Hutchison by Thomson Reuters. Click to enlarge the chart.
3:39 pm: Enoch Yiu
Consensus forecasts on the 2015 results of Cheung Kong Property by Thomson Reuters. Click to enlarge the chart
3:37 pm: Enoch Yiu
Share price charts of CK Hutchison and Cheung Kong Property for the past one year. Click to enlarge the charts.
