Hong Kong’s richest man Li Ka-shing’s two flagship companies – Cheung Kong Group and CK Hutchison Holdings, recently announced their latest mid-year performance and significant transaction progress. The dynamics of these two companies reflect multiple challenges they are facing in the current uncertain macro environment.
Cheung Kong Group’s financial report for the first half of 2025, released on August 14, showed a net profit of HK$6.302 billion, a significant decrease of 26.20% year-on-year. This decline was mainly attributed to the revaluation impairment of investment properties. Excluding this impact, the net profit saw a slight increase of 1.17%.
Of note, Li Tzar-kuei, who took over CK Group in 2018, was absent from the performance announcement for the first time. Following the release of the financial results, the company’s stock price dropped the next day.
To address the weak market conditions, Cheung Kong Group has adopted a “price reduction to increase volume” sales strategy in Hong Kong and mainland China. While this strategy led to a nearly 59% increase in property sales revenue in the first half of the year, it also eroded profit margins, resulting in a 2.91% year-on-year decrease in property sales income.
Specifically, property sales income in Hong Kong saw a significant decrease of over 90%. Management explained at the performance meeting that this was to stimulate sales by offering discounts in a weak market, and expressed cautious attitude towards the profit contribution in the second half of the year.
Looking ahead, management anticipates limited growth in the profitability of the property development business in the coming years. However, the company expressed interest in investing more in attractive commercial and retail properties or land in Hong Kong.
Furthermore, Cheung Kong Group’s current land reserves are at a relatively low level in recent years, drawing market attention to its future strategies.
Cheung Kong Group and CK Hutchison Holdings, both core listed companies under the Li Ka-shing family, focus on real estate and have diversified businesses including ports, energy, and telecommunications.
Meanwhile, CK Hutchison also announced that its planned sale of global ports may not be completed within the year. Originally intending to sell 43 ports globally, including two located in strategic positions at the Panama Canal, to a consortium led by BlackRock for $22.8 billion, the transaction has entered a “new stage,” including negotiations with a “key Chinese strategic investor,” according to CK Hutchison’s Joint Managing Director Canning Fok. Bloomberg reported that China Shipping Group is involved in the negotiations and seeks a strong position in the deal as a condition for joining the acquisition consortium.
The transaction has become significantly complex due to the geopolitical risks involved and is seen as a symbol of the competition between China and the US. Former US President Trump lauded the deal as a victory in regaining control of the Panama Canal, sparking strong discontent from Beijing. Despite longer-than-expected negotiations, Fok remains optimistic about reaching an agreement that is beneficial to all parties and gains approval from all relevant departments.
CK Hutchison’s port business showed good performance in the first half of the year, with growing revenue and pre-tax profit, providing the group with confidence and leverage to continue negotiations. Nevertheless, the outlook for this highly anticipated transaction remains uncertain.