S&P expresses concern about CK Hutchison’s diversification after ports sale

‘The completion of the transaction could also lead us to revisit our assessment of CKHH’s business diversification,’ S&P says

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People passed the Cheung Kong Center in Central. Photo: AFP

Published: 8:25pm, 7 Mar 2025

S&P Global Ratings on Friday expressed concern about CK Hutchison Holdings’ (CKHH) diversification and allocation of funds after the company said it would sell controlling interest in its ports business for US$23 billion.

Earlier this week, billionaire Li Ka-shing’s CKHH said it would sell 80 per cent of Hutchison Port Group, which owns 43 container ports in 23 countries, including Panama. US President Donald Trump had said earlier he wanted the US to regain control of the critical trade route.

While this move could improve the company’s financial health initially, the disposal could lead to a re-evaluation of the company’s diversification, the S&P report said.

“The completion of the transaction could also lead us to revisit our assessment of CKHH’s business diversification as the core business queues change to three from four,” S&P said.

Ports, retail, infrastructure and telecommunications are the four core pillars of the company. The rating agency considers the company to be “significantly diversified” because they have a low correlation between them.

Kenny Ng, a strategist at Everbright Securities said investors welcomed the sale, as it is expected to enhance earnings per share in the short-term. He also raised concerns about how CKHH could sustain the recurring income in the medium and long-term.

“When the retail property and telecom businesses did not perform well in the past, ports businesses provided recurrent income for the group,” said Ng.