Hong Kong tycoon Li Ka-shing’s Cheung Kong Group is enhancing its business presence in Europe in a bid to reduce its reliance on Hong Kong and mainland China.
According to a report by Nikkei Asia Review, Cheung Kong Infrastructure Holdings, a subsidiary company listed in Hong Kong and controlled by Li Ka-shing’s eldest son, Victor Li, announced on Wednesday (August 14) that it has successfully applied for a secondary listing on the London Stock Exchange. The company is set to begin trading on the London Stock Exchange next Monday.
In documents submitted to the Hong Kong Stock Exchange, Cheung Kong Infrastructure stated that this move “will benefit a geographically diversified shareholder base and help establish the company’s image, providing a larger market for its stock trading.”
As Cheung Kong Infrastructure embarks on its secondary listing, the group has initiated a new round of acquisitions in Europe, spanning across industries such as ports, telecommunications, power, retail, and finance.
Cheung Kong Infrastructure disclosed its mid-year performance for 2024 on Wednesday, announcing that a consortium comprising Cheung Kong Infrastructure, Cheung Kong Holdings, and Power Assets Holdings will acquire a portfolio of onshore wind power assets in the UK for approximately £350 million (US$448 million), with the transaction expected to be completed in September. The portfolio includes 32 wind farms located in England, Scotland, and Wales.
In May, Cheung Kong Infrastructure acquired UU Solar for £90.8 million, which owns and operates 70 renewable energy generation assets in the UK.
In April, a consortium composed of Cheung Kong Holdings, Cheung Kong Infrastructure, and Power Assets Holdings agreed to acquire Phoenix Energy, the largest natural gas distribution network in Northern Ireland, for £760 million.
Nikkei reported that the series of moves by the Li Ka-shing-led group in Europe signifies a decreasing relative weight of Hong Kong and mainland China in the group’s investment portfolio amid the economic downturn in China.
Radio Free Asia reported that economist Siling believes that Cheung Kong Infrastructure’s actions indicate that Hong Kong tycoons are pessimistic about the economic prospects of China and Hong Kong.
“Siling also sees that international hot money is fleeing the Greater China region, which is a form of voting with their feet. The fundamental issue for the Hong Kong stock market and China’s A-share market is the level of participation from market players, who are becoming increasingly pessimistic about the long-term economic growth expectations and performance of this economy, showing a lack of confidence in the future economic growth of China, including Hong Kong,” he said.
Siling believes that other groups will follow Li Ka-shing’s lead, ultimately leading to a situation where inferior quality stocks dominate the market, making it harder to attract valuable investors like Warren Buffett and impacting market quality.
According to Nikkei Asia Review, on Thursday, Li Ka-shing took care to avoid giving the impression that the group is abandoning Hong Kong and China in favor of Europe. He stated that he dared not short-sell in the severely troubled Hong Kong market or bet against the long-term growth of the Chinese retail market. However, he acknowledged the “difficult” situation on the mainland due to weakened consumer demand.