Long-awaited news from the Chiang Jiang Infrastructure (01038) shareholder meeting held on the 22nd of this month! When asked about the recent acquisition of multiple overseas businesses and the possibility of future investments in the local market, Chairman Li Zeju expressed his sentiment towards Hong Kong, his hometown, stating that if there are projects offering reasonable returns, they will definitely invest in Hong Kong.
As an international financial center, Hong Kong has seen an increasing number of international companies and international family offices setting up their operations there. Regardless of the ethnicity or nationality of the principals, Li Zeju believes that Hong Kong’s position as an international financial hub will only become stronger. This will, in turn, enhance Hong Kong’s economic foundation, creating favorable conditions for long-term development.
Within the span of a month, the group has successfully acquired the Northern Ireland gas distribution network, Phoenix Energy, and the UK renewable energy asset portfolio, UU Solar. Li Zeju emphasized that their investment decisions are based on the project’s potential to generate ideal returns rather than the region where it is located. They view any project that yields desirable returns as high-quality assets worthy of consideration, regardless of the country or region where they are situated.
The recent acquisition of the gas distribution company is deemed a high-quality regulated asset, bringing in stable cash flow and immediate returns while continuing to deliver recurring profits. As for the new solar energy environmental project, 90% of the revenue is sourced from long-term contracts and government subsidies for renewable energy. This initiative is expected to offer immediate returns, contribute recurrent profits, and ensure stable cash flow. As of December 31, 2023, Chiang Jiang Infrastructure held cash reserves of HK$13 billion, with a net debt-to-equity ratio of 7.7%.
Regarding the moderate profit growth recorded last year, Li Zeju explained that excluding the one-off gains from the partial sale of Northumbrian Water in 2022, the company’s net profit increased by 12% last year, reaching an operational cash flow of HK$8.6 billion. He underscored that the majority of Chiang Jiang Infrastructure’s investment portfolio comprises regulated businesses, with their performance being notably stable, even in the non-regulated sectors.