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Why CK Hutchison Is An Undervalued Gem

Wubbe Bos profile picture
Wubbe Bos


  • CK Hutchison is a large conglomerate managed by Li Ka Shing also known as Superman.
  • The valuation is cheap while the underlying assets are valued highly in today's market.
  • Investing in Europe through Hong Kong might seems overly complicated but valuation should be more important.
  • Operational performance has been masked by currency headwinds but a weaker dollar will create an additional tailwind.
  • Strong balance sheet with low debt increases the attractiveness of CK Hutchison even further.

CK Hutchison (OTCPK:CKHUY) is a Hong Kong conglomerate with a market value of $48B with most of its assets located in the UK and continental Europe. Those assets are deemed unattractive by Asian investors because of Brexit while other investors think it is unnecessarily complicated to invest in Europe through Hong Kong.

The good and steady operational performance of CK Hutchison has been masked by currency headwinds but since these winds are changing, CK Hutchison will benefit and its excellent operating record will be revealed once more.

CK Hutchison has its primary listing in Hong Kong but also two OTC listings as well but I would recommend to buy in Hong Kong since that listing is a lot more liquid. CK Hutchison was created when Li Ka Shing split his business empire in 2015. Li Ka Shing is a legendary self made businessman who amassed a fortune of currently $32B. With the split Li Ka Shing created two companies, Cheung Kong Holdings (OTC:CNGKY) which primarily invests in real estate and CK Hutchison which holds the other assets which are:

  • Infrastructure assets in the form of gas and electricity networks in developed countries like the UK, Australia and continental Europe responsible for 36% of EBIT.
  • Telecom assets: CK Hutchison is a provider of Telecom services in many European countries, Hong Kong and is growing rapidly in Vietnam and Indonesia. 26% of EBIT.
  • Retail assets are primarily beauty and health stores operating among others under the Watson, Rossmann and Kruidvat brand. 19% of EBIT.
  • Port operations, CK Hutchison is the largest operator of ports in the world with operations in 48 ports and 25 countries. 12% of EBIT.
  • Husky Energy, a Canadian oil company which is also drilling in the Chinese Sea. 5% of EBIT.

Source: IR Presentation CK Hutchison


This article was written by

Wubbe Bos profile picture
Dutch investor. Interested in international investing opportunities. Experience writing for Dutch investment magazine BeleggersBelangen.nl and Dutch IB broker lynx.nlCurrently working for the worlds most sustainable bank.

Analyst’s Disclosure: I am/we are long CKHUF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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