HCM - CK Hutchison Holdings Ltd: A 'China Discount' Is Not Warranted
2024-07-04 11:09:32 ET
Summary
- CK Hutchison Holdings Ltd. trades at an inexpensive valuation both in terms of earnings multiples and relative to its sum of the parts valuation.
- The company's limited geographic exposure to Greater China makes a "China discount" unwarranted, in my opinion.
- I believe that, at the current share price, the stock is undervalued by up to 40 percent.
- CK Hutchison pays attractive dividends, yielding around 6.7 based on last year's cumulative distributions.
Recently, I covered both Jardine Matheson Holdings Ltd. ( OTCPK:JARLF ; OTCPK:JMHLY ) and Swire Pacific Ltd. ( OTCPK:SWRAF ; OTCPK:SWRAY ; OTCPK:SWRBF ; OTCPK:SWRBY ), two storied Hongkong based conglomerates. These companies trade at relatively inexpensive valuations, part of which is presumably a consequence of their exposure to the Greater China market. CK Hutchison Holdings Limited ( OTCPK:CKHUF ; OTCPK:CKHUY ) is another such group with a similar history. In fact, one of the group’s predecessors was the first company to list at the Hong Kong stock exchange, hence the HKEX ticker 00001 . Today, it is much more focused on Europe than it is on its home market....
CK Hutchison Holdings Ltd: A 'China Discount' Is Not Warranted