Minimal exposure for Hutchison if its Panama operations canceled

CK Hutchison (0001) is expected to be only slightly affected if Panama cancels its contract for operating ports, as the contribution from those operations is limited, JP Morgan says in a report.

Panama is said to be weighing whether to cancel its contract with Hutchison Ports, a subsidiary of CK Hutchison that operates ports near the Panama Canal – a potential concession to defuse US President Donald Trump’s threats about countering China’s influence around the key waterway.

JP Morgan estimates CK Hutchison’s exit from Panama to have less than a 1 percent impact on its earnings before interest, taxes, depreciation and amortization.

Hong Kong billionaire Li Ka-shing’s conglomerate CK Hutchison operates 53 ports across 24 countries, handling 82.1 million twenty-foot equivalent units in 2023, while its Panama operations account for 3.9 percent of the total at 3.2 million TEUs, according to JP Morgan.

Moreover, CK Hutchison’s business is mainly in Europe, and its exposure to the United States is limited, so any further escalation in China-US tensions is unlikely to have a significant impact, the bank added.

JP Morgan is maintaining its “overweight” rating on CK Hutchison, with a target price of HK$50.

Panama’s presidential office and Hutchison Ports did not immediately respond to a request for comment.

BLOOMBERG and STAFF REPORTER