On August 19th at 8 a.m. UK time, CK Infrastructure (01038.HK) was approved to conduct a secondary listing on the London Stock Exchange, with the stock code “CKI” for trading in both the Hong Kong Stock Exchange and the Main Board Market of the London Stock Exchange simultaneously. The Li Ka-shing family, which has recently been selling properties at a discount in both mainland China and Hong Kong to cash out, is seen accelerating the shift of their investment focus from China and Hong Kong to Europe.
CK Infrastructure Holdings Limited is a subsidiary of Cheung Kong Group (CK Hutchison, 1113.HK), which is listed in Hong Kong. It is controlled by Li Ka-shing’s eldest son, Li Zeju, who serves as Chairman and CEO of Cheung Kong Group.
Following the news, the stock price of CK Infrastructure in the Hong Kong Stock Exchange saw a slight decline. After opening down 0.4% on August 15th, it fell by nearly 5% to 53.65 Hong Kong dollars (6.88 US dollars) before stabilizing slightly at 55.9 Hong Kong dollars (7.17 US dollars), representing a 0.8% drop and bringing the group’s market value down to 140 billion Hong Kong dollars (17.965 billion US dollars). However, between the announcement of considering listing in the UK on July 11th and the close of trading on August 15th, the stock price had already risen by 21.7%.
Li Ka-shing’s Cheung Kong and Hutchison Whampoa Limited (CK Hutchison, 00001.HK) is a large multinational conglomerate. CK Infrastructure, a subsidiary of the Li Ka-shing family’s Cheung Kong Group, is the entity responsible for the group’s infrastructure business, with 75.67% of CK Infrastructure owned by CK Hutchison.
A secondary listing refers to a company that is already listed in its home country or region, listing some of its shares on another unregistered stock exchange.
In a statement, CK Infrastructure mentioned that the UK is its largest market, accounting for 35.7%, 35.2%, and 29.1% of the company’s attributable profit in 2023, 2022, and 2021 respectively.
In the first half of 2024, the Cheung Kong Group has been active in overseas investments. Alongside the announcement of the second listing in London by CK Infrastructure, the group has initiated a new wave of acquisitions in the UK, covering industries such as real estate, ports, telecommunications, power, retail, and finance.
On August 14th, CK Infrastructure announced the acquisition of a portfolio of UK wind farms from Aviva Investors, a global asset management company under UK insurance company Aviva, for a price of 350 million pounds (448 million US dollars). The portfolio includes 32 operational onshore wind farms located in England, Scotland, and Wales.
CK Infrastructure stated that these assets will provide immediate returns, stable cash flow, and contribute to regular profits. The transaction is expected to be completed by late September.
In addition, in May this year, CK Infrastructure, along with electricity utility companies within the CK Hutchison Group, jointly acquired UK Power Networks for 88 million pounds (113.9 million US dollars), fully taking over SEEIT Sol Limited (UU Solar), which owns a 68.7-megawatt renewable energy asset portfolio. The acquired company was later renamed Powerlink Renewable Assets.
The company operates 70 renewable energy generation facilities in the UK, including solar, wind, and hydroelectric power plants, providing rapid returns and stable cash flow, with 90% of revenues secured by long-term agreements and subsidies.
In April, the group also acquired Phoenix Energy, the largest natural gas distribution network in Northern Ireland, covering 78% of the gas pipelines in Northern Ireland and serving 48% of the local population.
Financial media analyst Yan Baogang, in an interview with Da Ji Yuan, analyzed that with the substantial investments of the CK Hutchison Group in the UK, listing on the London Stock Exchange could attract not only local UK pension funds to hold CK Infrastructure shares but also attract significant capital from international investors.
Meanwhile, as the Li family, who started in real estate, intensifies its acquisitions in European infrastructure, they are heavily discounting and selling new properties in mainland China and Hong Kong.
In mid-July, it was reported that Li Ka-shing was selling 30 available properties in the Haiyi Haoting residential complex in Dongguan, Guangdong Province, at half price in the mainland Chinese market. The complex features a 2000-mu Haiyi golf international championship course, one of the rare thousand-mu single-plots in Dongguan.
In Hong Kong, CK Hutchison offered discounts on units in the #LYOS project, a stratified residential building and garden duplex residences in Hung Shui Kiu, northwestern New Territories on May 19th this year. The stratified units were marked down by up to 25%, while the garden duplex units were discounted by up to 32%.
In April, CK Hutchison, in collaboration with MTR Corporation (066), launched the Blue Coast in Phase 3B of Wong Chuk Hang Station on Hong Kong Island, offering a 30% discount on the opening day. All 413 units were sold out, recording sales of nearly 7.5 billion Hong Kong dollars (962 million US dollars) and breaking the record for the highest single-day sales of a new property in Hong Kong in the past decade.
Executive Director of CK Hutchison, Zhao Guoxiong, described the pricing as “hitting rock bottom” and “making little to earn” (‘kaau siu dong yeng’ in Cantonese).
In fact, Li Ka-shing began reducing assets in mainland China and Hong Kong twenty years ago, gradually transferring funds to public utilities and telecommunications businesses in Europe, as well as energy ventures in Canada and Australia. The proportion of profits from the European and UK markets has been increasing since 2002, reaching 41% in 2005, higher than the 20% in Hong Kong and 8% in mainland China.
In 2015, a CCP-affiliated think tank published an article titled “Don’t Let Li Ka-shing Run Away,” criticizing Li Ka-shing’s withdrawal of investments. While Li Ka-shing rarely denied the accusations and did not halt the shift in investment focus.
As of June 30th this year, the total assets of CK Hutchison in Hong Kong and mainland China amounted to 106.56 billion Hong Kong dollars (13.66 billion US dollars), representing only 12% of the group’s total assets, further down from 19.21% at the end of 2015. Meanwhile, assets in Europe totaled 575.56 billion Hong Kong dollars (738.15 billion US dollars), accounting for over 66%, far exceeding the 46.88% share at the end of 2015.