Despite China's pressure, Li Ka-shing still promotes the sale of CK Hutchison, what has the business tycoon foreseen?

Li Ka-shing, a famous entrepreneur in Hong Kong, was once the richest man in Asia for many years and is also a respected business investment master. Having long since retired and stepped back from the spotlight, he has recently made several appearances in the media headlines. His founded Cheung Kong Holdings has long been engaged in port operations and holds the concession for the Panama Canal. Following reports that BlackRock will lead the acquisition of 80% of the shares of Hutchison Port Group, it has triggered attention and pressure from high-level Chinese officials. This 96-year-old, who no longer participates in daily operations but is involved in negotiations, is stubbornly pushing this deal forward. Could it be because he anticipates that ports around the world will face structural decline after Trump returns to the White House?

(Trump's pressure effective? BlackRock leads the acquisition of control over Panama port )

Li Ka-shing's business acumen is sharp, having sold multiple times at high points.

According to a report by Bloomberg columnist Shuli Ren, Li Ka-Shing has a keen sense of timing when it comes to selling. In 1999, at the peak of the internet bubble, he divested his stake in British mobile operator Orange for about $15 billion. At the end of 2017, this businessman sold a skyscraper in Hong Kong's central business district for a record $5.2 billion. Just over a year later, the city's office building real estate market peaked. Since then, the skyscraper has undergone a significant turnover; mainland Chinese property developers who took over some floors have fallen into trouble and have had to sell at a loss.

However, this highly politicized Hutchison Port transaction is intriguing. Only two Panama ports are at the crossroads of geopolitics; why is the Cheung Kong Group selling all its businesses outside of Hong Kong and mainland China? Additionally, there has been dissatisfaction from Beijing, which has even urged state-owned enterprises not to engage in any business cooperation with the Li Ka-shing family. However, this 96-year-old, who is no longer involved in daily operations but participated in the negotiations, stubbornly pushes this deal forward. Is it because he anticipates that ports around the world will face structural decline after Trump returns to the White House?

Currently, the port operation profits are substantial. Last year's EBITDA growth was 24%. Moreover, with the increase in automation, this business is expected to achieve even higher profits. However, considering Li Ka-shing's past practices, it is not unreasonable for him to sell the company while its financial condition is still good.

CK Hutchison has been deleveraging since 2020.

Since 2020, CK Hutchison has been steadily deleveraging. That year, the company sold its European tower assets to Cellnex Telecom SA for €10 billion, approximately $11 billion, and retained the cash thereafter. Once the deal to sell most of its ports to a consortium led by BlackRock is completed for $19 billion, the company may be able to shed its debt.

According to informed sources, the plan for CK Hutchison to sell two Panama ports to a group led by BlackRock is progressing as scheduled, indicating that negotiations have not been disrupted by China's anger over the deal.

As economists continue to debate whether global trade has come to an end or is merely being restructured, Li Ka-shing's decision to sell the port division of Cheung Kong Group raises concerns. What has he seen?

Berkshire Hathaway, which also holds a large amount of cash, has recently seen its stock price reach new highs. Has Buffett, with all that cash, already foreseen a recession? This is also a focal point for investors.

( Berkshire stock price hits a new high, will Buffett use his cash to buy the dip or hold on to US bonds? )

This article does not care about China's pressure; Li Ka-shing continues to promote the sale transaction of CK Hutchison. What has this business tycoon foreseen? First appeared in Chain News ABMedia.