CK Hutchison Flags Political Risk as Port Deal Upsets China

CK Hutchison Holdings Ltd.’s stock slumped after the Hong Kong conglomerate reported weaker-than-expected profit while a ports sale plan faces uncertainty after infuriating Beijing.

Shares plunged as much as 3.3% on the morning of March 21 in Hong Kong. The company has warned of a deteriorating global business environment due to geopolitical and trade tensions in an earnings statement released after the market close on March 20. 

Billionaire Li Ka-shing’s flagship firm reported a 27% decline in net income to HK$17.1 billion ($2.2 billion) for 2024, missing analyst expectations for HK$22.5 billion, according to a statement on March 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 U.S. and China since it announced an agreement to sell 43 ports — including two in Panama — to a consortium led by BlackRock Inc. While the conglomerate is set to make $19 billion in cash proceeds from the deal, the agreement has enraged Beijing after President Donald Trump touted it as a reclamation of the Panama Canal.

“The operating environment for the group’s businesses is expected to be both volatile and unpredictable,” Chairman Victor Li said in the statement. He cautioned about headwinds from geopolitical developments, which could in turn spawn supply chain disruptions in the early part of 2025.

The group will rein in capital spending and new investment, while tasking its businesses to increase productivity and reduce operating spending, Li said.

Several Chinese state agencies are studying CK Hutchison’s ports deal for any potential security breaches or antitrust violations, Bloomberg previously reported. It’s unclear what levers China can pull