Victor Li explains the value of CKI sharesBusiness | Winnie Lee 13 May 2021
Chairman Victor Li Tzar-kuoi said at the annual meeting of CK Infrastructure (1038) that the company will repurchase shares when necessary and that the share price is undervalued.
If calculated as a multiple of the regulatory asset value (RAV) of the recent sale of a British company, the value of the British water business, electric power and gas company held by CKI and the equity of Power Asset (0006) held by CKI is almost equal to CKI's current stock price, Li said.
CKI's other businesses in the UK such as UK Rails and Seabank Power, other businesses in Australia, New Zealand, Europe, Canada, the United States, Hong Kong and mainland China have not been taken into account.
This showed that the current share price is far underestimated, and does not fully reflect the value of the company's assets.
On the pace of CKI's future repurchase plan, Li pointed out that CKI plans to implement several merger and acquisition projects, and it will only accelerate the overall pace when the pandemic eases and it will be easier for CKI to send personnel to conduct on-site due diligence.
A shareholder asked if the acquisition of infrastructure assets by CK Asset (1113) would be confused with CKI's positioning.
Li said the positioning of the two companies is completely different. CKI is a pure infrastructure investment company, while CK Asset focuses on real estate.
Meanwhile, the chairman of Power Asset (0006), Canning Fok Kin-ning, said at the group's AGM that the merger between Power Asset and CKI is outdated and will no longer be considered.
As to whether Power Asset will allocate shares of HK Electric (2638) to the State Grid, he responded that he is glad to become the largest shareholder of HK Electric and has not considered relevant matters for the time being.
Fok, also the chairman of HK Electric, said HK Electric's five-year development plan will not change due to the pandemic. The plan has run for two years and involved an investment of HK$26 billion.
He said that the company still has to deal with more than HK$10 billion investment in the remaining three years, so it needs to retain a certain amount of capital to deal with it.
Fok wants to continue to distribute stable dividends.