Long/short equity, medium-term horizon, value, growth

Cheung Kong Holdings: A Classic Conglomerate Valuation Dilemma

Cheung Kong Holdings (CHEUY.PK) (0001.HK), headquartered in Hong Kong, is a conglomerate controlled by Asia's richest man, Li Ka Shing. It is a major property developer in Hong Kong and China, and has interests in hotels, infrastructure and investments & finance. Cheung Kong Holdings also owns a 49.9% stake in Hutchison Whampoa (OTCPK:HUWHY) (0013.HK), a global conglomerate in itself, with business interests in ports, telecommunications, property and hotels, retail, energy and infrastructure.

The market value of the 49.9% stake in Hutchison Whampoa represents more than 75% of the market value of Cheung Kong, and with a sum-of-the-parts valuation, we will find that Cheung Kong's non-Hutchison assets are deeply undervalued.

Using a sum-of-the-parts valuation

Given that Cheung Kong (Holdings)...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details