High Profit Margin at CK Infrastructure
Background
CK Infrastructure Limited is a Hong Kong based holding company invested in a range of mainly large-scale infrastructure assets in Europe, Australia, and North America.
Its ultimate shareholder is CK Hutchison Holdings Ltd (1 HK), with 77%. Its investments range from water utilities to railroads and energy companies
Business Description
CKI is a Hong Kong-based infrastructure holding company within the CK Hutchison Group (1 HK). The CEO is Victor Li, the eldest son of Li Ka Shing, Hong Kong’s wealthiest billionaire businessman. The group owns a stake in Power Assets Holdings Limited (6 HK), and the two companies have a number of joint investments in infrastructure assets.
The group’s major source of income is dividends generated from investments in infrastructure assets located in the UK and Australia. Its most recent acquisition was a 30% interest in a portfolio of infrastructure assets held by the Hutchison Group in September 2018. The assets range from Northumbrian Water to Australian Gas Networks.
Separately, the Australian government has announced that it is unlikely to block CKI’s investment in 20% of APA, one of Australia’s largest gas infrastructure groups.
Given the increasing leverage of the group and its high exposure to the UK, it plans to sell off some UK utility assets through an IPO.
Leadership
Victor Li Tzar Kuoi has served as the Chairman of CKI since 1996. He holds multiple positions in CK Hutchison Holdings Limited (1 HK) and other companies. Moreover, he is a member of the Chief Executive’s Council of Advisers on Innovation and Strategic Development of the Hong Kong Special Administrative Region and Vice Chairman of the Hong Kong General Chamber of Commerce. He obtained a Bachelor of Science degree in Civil Engineering, Master of Science degree in Civil Engineering and Doctor of Laws, which is an honorary degree.
Kam Hing Lam has been Group Managing Director of CKI since 1996. He also holds Deputy Managing Director position, Executive committee, President and CEO at the companies under CK group and other listed companies. He graduated with Bachelor’s degree in Mechanical Engineering from the National University of Singapore.
World Class Benchmarking
Profitable Growth has been excellent over the years, and the past 12-month performance ranked CKI in the top 62 out of 310 large Utilities companies worldwide.
Profitability has shown the same ranks as Profitable Growth. However, Growth has stayed below average since 2015.
Asset utilization has been steady at the worst rank throughout the time period, which is different from Profit margin that has consistently been at #1.
Sales growth has shown a positive trend since 2016. Margin dropped to #10 in 2015 and has stayed there since.
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