[HONG KONG] CK Hutchison Holdings warned of geopolitical risks to global trade, as the Hong Kong conglomerate reported weaker-than-expected profit and a ports deal faces uncertainty amid rising US-China tensions.
Billionaire Li Ka-shing’s flagship firm reported HK$17.1 billion (S$2.9 billion) in net income for 2024, missing analyst expectations for HK$22.5 billion, according to a statement on Thursday (Mar 20). Revenue came in at HK$476.7 billion, compared with HK$462 billion a year earlier. It announced a full-year dividend of HK$2.2 per share, compared with HK$2.53 per share a year before.
CK Hutchison, now led by Li’s son Victor Li, has been caught in the crosshairs of increasing tensions between the US and China since it announced an agreement to sell 43 ports – including two in Panama – to a consortium led by BlackRock. While the conglomerate is set to make US$19 billion in cash proceeds from the deal, the agreement has enraged Beijing after President Donald Trump touted it as reclaiming the Panama canal.
“Looking ahead to 2025, there maybe headwinds with supply chain disruptions anticipated in the early part of the year due to shipping lines transitioning into their new alliances, as well as ongoing geopolitical risk impacting global trade,” Li said.
Several Chinese state agencies are studying CK Hutchison’s ports deal for any potential security breaches or antitrust violations, Bloomberg reported earlier this week. It’s unclear what levers China can pull to block the deal, given that it involves the company’s overseas assets. The group has kept all of its ports in Hong Kong and mainland China.
The company reported an 11 per cent increase in revenue at its ports and related services business, but did not mention the sale or its ports portfolio, including the two terminals it operates in the Panama canal.
Meanwhile, investors have boosted options bets to an eight-year high, as they await for more clues on the ports deal, with a definitive agreement expected to be signed by Apr 2.
While the group typically holds press and analyst briefings following the announcement of its annual results, they were skipped this year, highlighting the sensitivity of the deal.
The group’s operations in Hong Kong and mainland China mainly include ports in places like Shenzhen and Shanghai, supermarkets, health and beauty retail, telecommunications and biotech development. These businesses could become targets if Chinese authorities decide to penalise the company for selling to the US what they view as strategic assets to China’s interest. BLOOMBERG
