City must strive to retain hub status, says Victor Li

CK Hutchison (0001) and CK Asset (1113) chairman Victor Li Tzar-kuoi said Hong Kong must maintain its status as an international financial center, as the city-grown business leader warns of a challenging year ahead.

Li added that CK will continue its prudent approach to business management, after cutting final dividend distributions of CKH and CKA by over 12 percent off of decreased net profits.

Speaking at a press conference yesterday, Li said Hong Kong has experienced a tough time these past few years and how the IFC status is a "hard-earned" achievement.

"There are only three IFCs. Hong Kong must, must, maintain this position," said Li, the elder son of billionaire Li Ka-shing.

The future development of the SAR is largely up to the government, he added, but didn't suggest any specific measures.

In terms of Hong Kong's property market, Li thinks the negative factors on the local economy have gone, such as housing curbs and interest rate hikes, and believes the probability of going "downside" is lower than the opposite.

In a "mixed" 2023, CKH saw its net profit slump 36 percent to HK$23.5 billion, blaming a slower-than-expected economic recovery and the absence of one-time gains.

CKH warns of uneven global economic growth and heightened geopolitical risks, especially with the upcoming elections in the United States and several major countries in which the company operates.

Regarding outbound Hongkongers, CKH said its local retail business feels the pressure despite the recovery last year. Watsons will offer more discounts and other measures to attract local customers.

CKA said its net profit declined by 19 percent to HK$17.3 billion, as property sales last year plummeted 49 percent to HK$13.15 billion.

Li said CK will continue seeking new investments, but prefers projects bringing "reasonable" returns compared to global market levels.

And this prudent strategy has benefited CK. Li said CKA could not have a gearing ratio of 3 percent if the developer had bought a lot of sites during the peak four to five years ago.