“We’re living in a world in turmoil today,” Victor Li Tzar-kuoi, chairman of Hong Kong-based conglomerate CK Hutchison Holdings, told analysts on an earnings call last month.
He meant not just the war in the Middle East but also US-China rivalries that have put his group at the center of a geopolitical struggle in Central America over control of the Panama Canal.
Yet neither of these major flashpoints involving key waterways has deflected the commercial empire controlled by tycoon Li Ka-shing’s family from its strategy of building a substantial war chest of its own, reserved for scaling up its business and riding out any political and economic storms ahead.
CKH, the group’s flagship conglomerate alongside CK Asset Holdings, had been cutting debt and showing its “strong resilience in navigating under an extremely volatile macro environment,” the chairman said. “The group’s businesses will undoubtedly face some new and perhaps some foreseeable challenges in 2026 … we’ll also maintain our long-term objective of exploring value-accretive transactions for our shareholders.”
But before it decides on and completes its next big acquisition, it is looking to unblock one of the largest disposals in the company’s history, namely the stalled port sales transaction announced by CKH in early March 2025.
Following US President Donald Trump’s call to “take back” the Panama Canal from what he viewed as Chinese control, CKH disclosed a USD 22.8 billion deal to sell 43 ports and 199 berths in 23 countries around the globe, including at both ends of the canal, to a consortium led by US asset manager BlackRock and global container shipping line MSC. But the transaction ground to a halt after China criticized the move through Beijing-backed media as “betraying” the Chinese people and launched an antitrust probe, even though ports in mainland China and Hong Kong are excluded from the deal.
There are also legal complications, with CKH taking the Panamanian authorities to international arbitration following the de facto confiscation of the two ports—Balboa and Cristobal—in February. It is claiming more than USD 2 billion in damages, according to the latest filing to the International Chamber of Commerce Court of Arbitration at the end of last month.
Speaking on the same call as Li, Frank Sixt, finance director and co-managing director, described the Panamanian government’s actions as a “completely unlawful expropriation of our franchise and confiscation of our working assets” in the country. Sixt is one of several loyal lieutenants of 97-year-old founder Li Ka-shing who have continued to serve his eldest son, after Victor Li followed his father as chairman in 2018.
Other deals done over the past year have been much more straightforward and have boosted cash reserves. Free cash flow more than doubled in 2025 from a year earlier, to HKD 41.2 billion (USD 5.3 billion). That included the receipt of GBP 1.3 billion (USD 1.7 billion) of net proceeds from the UK telecoms merger of its Three mobile network and Vodafone, among others. Net debt fell 12.2% to HKD 113.7 billion (USD 14.5 billion), while CKH was left sitting on cash and cash equivalents of HKD 143.7 billion (USD 18.3 billion) by December 31.
The dealmaking continued into the new year. The completion of the divestment of its 70% interest in Eversholt UK Rails in January brought in GBP 1.1 billion (USD 1.5 billion) and it agreed to sell UK Power Networks in February for GBP 10.5 billion (USD 14.1 billion), a transaction scheduled to be completed by midyear.
Victor Li denies any sudden change in strategy or speeding up of the divestment process, saying “our recent corporate actions reflect a consistent strategy rather than a shift in direction.” To him, it is an ongoing process “to unlock the value of our assets and strengthen our financial position.”
The disposal of UKPN to French energy conglomerate Engie is a case in point. The asset could have been kept in its portfolio, but the offer presented “a very good premium,” according to the chairman. CKH is expecting an HKD 14.5 billion (USD 1.9 billion) profit from the deal, as the price tag of the business almost doubled since buying it from another French company, Electricite de France in 2010.
With Catherine MacGregor, CEO of Engie, describing UKPN as a “superb asset”, the deal also demonstrated CKH’s skills in managing and improving companies in its four major business areas of infrastructure, telecoms, retail and ports.
Li has emphasized that “scale, efficiency, and technology” are the main priorities for enhancing corporate valuations going forward, as exemplified by its UK telecoms deal. Three UK was struggling as the fourth largest mobile network, but the Vodafone merger has created the largest player in the market, with 28 million subscribers.
Cenovus Energy is a similar case. The group owns a 16.4% stake in the Canadian oil company, as a result of a CAD 3.8 billion (USD 2.7 billion) all-stock merger completed in 2021, in which it gave up its controlling stake in Husky Energy but created the third-largest oil and gas company in the country.
The group’s share of the oil company’s EBITDA, or earnings before interest, taxes, depreciation, and amortization, in 2025 was HKD 9.8 billion (USD 1.3 billion), as production capacity reached around 1 million barrels of oil equivalent per day through its CAD 8.6 billion (USD 6.2 billion) acquisition of MEG Energy, completed last November. And given the US-Israeli attack on Iran and the restrictions on shipping through the Strait of Hormuz by the latter, “Cenovus Energy has become the group’s bright spot,” according to Li. Breakeven production cost per barrel for Cenovus is around USD 45, much lower than a global crude price of well over USD 100.
More value should be created with the reported spinoff of global retail arm AS Watson Group as early as the middle of this year, followed by a CK Hutchison Group Telecom listing in the second half.
Given its problems in Panama, CKH is also focusing on the reliability of the jurisdictions where the group plans to invest. “Basically, we are interested in capital-intensive projects in countries with a stable rule of law,” said Li, when questioned about his interest in acquiring the UK’s largest water company, Thames Water.
David Blennerhassett, analyst at Hong Kong-based Ballingal Investment Advisors, told Nikkei Asia that the logical future step forward for the group was to be in cash-generating utilities, including water, gas and telecoms, in stable countries and regions such as the UK, continental Europe, Canada, and Oceania. “I don’t see why that has to change,” he said.
Ratings agencies view CKH’s actions favorably. Fitch upgraded it by a notch to “A” in early March, meaning all three global agencies now give it single-A credit ratings or above, pushing down the average cost of debt to 3.3% in 2025 from 3.6% a year earlier.
“The company has been very prudent in managing its financial portfolio and is very heavily diversified … in businesses as well as geographically,” said Edward Chan, Hong Kong-based director at S&P Global Ratings. This enabled the group “to remain resilient amid geopolitical uncertainties.” After the Eversholt UK Rails and UKPN divestitures, Chan expects the adjusted debt-to-EBITDA ratio to be further reduced to 2.7 times, well below the downgrade trigger of four times.
However, low debt levels are less important to shareholders more concerned about CKH’s underperforming share price.
At around HKD 60 (USD 7.7) a share, the valuation represents just a third of the current net asset value per share of HKD 180, (USD 23) based on 2025 earnings. While a highly diversified portfolio is cherished, lingering problems with the port deal and the issue of conglomerate discounts—where the “sum of the parts” is often not reflected in the shares—have weighed on the stock.
Shareholders have been lobbying for a share buyback, not done since 2022, with the board again questioned over its policy at the annual meeting in May last year. Blennerhassett says repurchasing undervalued shares is the “best way” to address the equity valuation issue. But Li stressed on the analyst call that management believed “share buyback is not the only means of capital return [while] recurring earnings growth that enables consistent dividend return is another compelling way to reward shareholders.” The group will pay an annual dividend of HKD 2.312 (USD 0.3), a 5% increase from the year before, representing a 3.8% dividend return based on its Thursday closing price before the holiday weekend of HKD 60.75 (USD 7.8).
All eyes are now on whether spinoffs, listings, and fresh M&A activity, using its burgeoning cash pile, can act as catalysts for CKH’s share price, even without the completion of the port deal. “Our financial status is extremely healthy, so we are under no pressure to sell any assets,“ Li told reporters.
“From our experience, there will not be a case where we have no place to spend, having cash in hand,” he added. “Having such a nice war chest, we certainly have a way to use it.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
Note: CAD, GBP, HKD figures are converted to USD at rates of CAD 1.39 = USD 1 and GBP 0.75 = USD 1 and HKD 7.83 = USD 1 based on estimates as of April 13, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.