CK Hutchison: The Berkshire Hathaway of Asia

James Choa presented his in-depth investment thesis on CK Hutchison (Hong Kong: 1) at Asian Investing Summit 2016.

CK Hutchison: With a market capitalization of US$50 billion, CKH is an investment holding company with five core businesses in retail, infrastructure, telecom, and ports. The company was founded by chairman Li Ka Shing, recently named by Barron’s as one of the world’s best CEOs. Over the past 25 years, Li has increased book value per share, inclusive of dividends, by 2,270%, a track record that is comparable to that of Berkshire Hathaway (2,315%). Despite its outstanding performance, the company has traded at large discount to intrinsic value in recent years. In 2015, the Li family embarked on a complex reorganization under which Cheung Kong Holdings (the former holdco) will purchase shares in Hutchison Whampoa that it does not already own, and merge the companies under a new entity, CK Hutchison Holdings, while spinning off all real estate assets into a separate company. The restructuring not only aims to unlock value at the holding company but also to position CKH as a premier global conglomerate and world class capital allocator. CKH trades at a 30% discount to intrinsic value and at about 1x P/B, well below peers in developed markets.

About the instructor:

James Choa is a private investor. He previously served as Managing Director of Valiant Ocean Capital, a Hong Kong-based value-oriented investment firm focused on companies with substantial exposure to Asia. Prior to Valiant Ocean, James was a member in the Goldman Sachs Asian Special Situations Group (ASSG), a multi-billion proprietary investment group, based in Hong Kong. Since joining Goldman Sachs in 2006, James was responsible for multi-strategy investments in Asia, covering public equities, PIPEs, private equity, high-yield loans, distressed debts, convertible bonds and value-based investments. Before Goldman Sachs, James was an Associate at the New York private equity firm Ripplewood Holdings, where he was responsible for structuring and executing leveraged buyout transactions in the industrial sector. Subsequent to completing the $550 million investment in Kraton Polymers, a specialty chemical business, James was appointed by Ripplewood to design strategic growth plans and implement operational enhancement strategies at the portfolio company in Houston, Texas. James started his career in New York with BT Wolfensohn (which subsequently merged with Deutsche Bank) where he focused on advising clients in mergers, acquisitions, and corporate reorganizations. James received his MBA with a concentration in Corporate Restructuring & Turnaround Management at the Wharton School, University of Pennsylvania. James also graduated from the Jerome Fisher Program in Management & Technology from the University of Pennsylvania where he received his BSE in Finance and BAS in Systems Engineering. James is a CFA charter holder and a member of the Hong Kong Institute of Directors.