Portfolio holding Cheung Kong Holdings (CHUEY) says 2009 profit rose 53% as economic growth in China and Hong Kong lifted home sales and raised the value of its investment properties:
Net income climbed to HK$19.9 billion ($2.56 billion), or HK$8.59 a share, from a restated HK$13 billion, or HK$5.63, in 2008, the world’s second-biggest builder by market value said in a statement today. That beat the average HK$17.6 billion estimate of 10 analysts compiled by Bloomberg. Excluding earnings from its 49.97 percent stake in Hutchison Whampoa Ltd., profit jumped 91 percent to HK$12.8 billion, from HK$6.69 billion in 2008, the company said in the stock exchange filing.
Cheung Kong's ADRs have skyrocketed since I bought them -- but the company still trades for right around book value last I checked. I bought it at 70% of book during the time when the global financial crisis was in full swing.
My concern now is the reported bubble in China. The linked Bloomberg story quotes a Hong Kong analyst:
Cheung Kong is unlikely to be affected by measures to cool the property markets in Hong Kong and China because “the governments don’t want the markets to collapse, they just want prices to cool down a bit,” said Ngan, who has an “outperform” rating on the stock.
Well, that's all well and good. But I don't have that much faith in top-down central planning. With all due respect to Bob Woodward, we now know that Alan Greenspan was never really "The Maestro," and we'll likely see that there aren't any on the Mainland, either.
So I'll be keeping an eye out. If things heat up in China maybe I'll take some profits.
Normally I'd be worried about Li Ka-shing's age -- he's 81 now -- but I believe Cheung Kong has ample management talent onboard. Including Li's son, who serves as Deputy Chairman.