SEHK:1038

Stock Analysis Report

CK Infrastructure Holdings

Executive Summary

CK Infrastructure Holdings Limited, an infrastructure company, develops, invests, and operates infrastructure businesses in Hong Kong, Mainland China, the United Kingdom, Continental Europe, Australia, New Zealand, and Canada.

Rewards

PE ratio (14x) is below the Electric Utilities industry average (15.5x)

Earnings are forecast to grow 1.64% per year

Pays a high and reliable dividend of 4.2%

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Established dividend payer with imperfect balance sheet.


Similar Companies

Share Price & News

How has CK Infrastructure Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1038 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

1038

1.5%

HK Electric Utilities

1.6%

HK Market


1 Year Return

-6.0%

1038

-3.7%

HK Electric Utilities

6.0%

HK Market

Return vs Industry: 1038 underperformed the Hong Kong Electric Utilities industry which returned -4% over the past year.

Return vs Market: 1038 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1038IndustryMarket
7 Day0%1.5%1.6%
30 Day3.6%2.0%4.4%
90 Day2.6%4.6%8.6%
1 Year-2.2%-6.0%0.4%-3.7%9.9%6.0%
3 Year4.8%-6.4%19.1%-1.0%27.7%14.7%
5 Year8.4%-9.1%30.3%-0.1%21.7%1.4%

Price Volatility Vs. Market

How volatile is CK Infrastructure Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CK Infrastructure Holdings undervalued compared to its fair value and its price relative to the market?

13.9x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1038 (HK$57.85) is trading above our estimate of fair value (HK$52.63)

Significantly Below Fair Value: 1038 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1038 is good value based on its PE Ratio (14x) compared to the Electric Utilities industry average (15.5x).

PE vs Market: 1038 is poor value based on its PE Ratio (14x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 1038 is poor value based on its PEG Ratio (8.5x)


Price to Book Ratio

PB vs Industry: 1038 is overvalued based on its PB Ratio (1.4x) compared to the HK Electric Utilities industry average (1.4x).


Next Steps

Future Growth

How is CK Infrastructure Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

1.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1038's forecast earnings growth (1.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 1038's earnings (1.6% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 1038's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1038's revenue (1.9% per year) is forecast to grow slower than the Hong Kong market (10.2% per year).

High Growth Revenue: 1038's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1038's Return on Equity is forecast to be low in 3 years time (9.1%).


Next Steps

Past Performance

How has CK Infrastructure Holdings performed over the past 5 years?

-24.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1038 has high quality earnings.

Growing Profit Margin: 1038's current net profit margins are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: 1038's earnings have declined by -24.8% per year over the past 5 years.

Accelerating Growth: 1038's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1038 had negative earnings growth (-0.9%) over the past year, making it difficult to compare to the Electric Utilities industry average (-14.7%).


Return on Equity

High ROE: 1038's Return on Equity (9.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CK Infrastructure Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1038's short term assets (HK$10.5B) exceed its short term liabilities (HK$6.7B).

Long Term Liabilities: 1038's short term assets (HK$10.5B) do not cover its long term liabilities (HK$44.7B).


Debt to Equity History and Analysis

Debt Level: 1038's debt to equity ratio (41.8%) is considered high.

Reducing Debt: 1038's debt to equity ratio has increased from 25.6% to 41.8% over the past 5 years.

Debt Coverage: 1038's debt is not well covered by operating cash flow (11.1%).

Interest Coverage: 1038's interest payments on its debt are well covered by EBIT (6.1x coverage).


Balance Sheet

Inventory Level: 1038 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1038's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is CK Infrastructure Holdings's current dividend yield, its reliability and sustainability?

4.22%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%2.2%markettop25%6.0%industryaverage4.2%forecastin3Years4.4%

Current dividend yield vs market & industry

Notable Dividend: 1038's dividend (4.2%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1038's dividend (4.2%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 1038's dividends per share have been stable in the past 10 years.

Growing Dividend: 1038's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.6%), 1038's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1038's dividends in 3 years are forecast to be covered by earnings (60.7% payout ratio).


Next Steps

Management

What is the CEO of CK Infrastructure Holdings's salary, the management and board of directors tenure and is there insider trading?

14.0yrs

Average management tenure


CEO

Hing Lam Kam (73yo)

23.7yrs

Tenure

HK$15,972,000

Compensation

Mr. Kam Hing Lam, B.ScE, MBA has been Deputy Managing Director and Executive Director of CK Asset Holdings Limited (formerly Cheung Kong Property Holdings Limited) since February 26, 2015. Mr. Kam has been ...


CEO Compensation Analysis

Compensation vs Market: Hing Lam's total compensation ($USD2.05M) is above average for companies of similar size in the Hong Kong market ($USD1.00M).

Compensation vs Earnings: Hing Lam's compensation has been consistent with company performance over the past year.


Management Age and Tenure

14.0yrs

Average Tenure

58.5yo

Average Age

Experienced Management: 1038's management team is seasoned and experienced (14 years average tenure).


Board Age and Tenure

15.0yrs

Average Tenure

61yo

Average Age

Experienced Board: 1038's board of directors are seasoned and experienced ( 15 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Frank Sixt (67yo)

    Executive Director

    • Tenure: 23.7yrs
    • Compensation: HK$75.00k
  • Victor Li (55yo)

    Executive Chairman

    • Tenure: 23.7yrs
    • Compensation: HK$33.31m
  • Ivan Chan (56yo)

    Chief Planning & Investment Officer

    • Hing Lam Kam (73yo)

      Group MD & Executive Director

      • Tenure: 23.7yrs
      • Compensation: HK$15.97m
    • Canning Fok (68yo)

      Deputy Chairman of the Board

      • Tenure: 22.8yrs
      • Compensation: HK$75.00k
    • Dominic Chan (56yo)

      CFO & Executive Director

      • Tenure: 9yrs
      • Compensation: HK$10.47m
    • Edmond Ip (67yo)

      Deputy Chairman of the Board

      • Tenure: 16.9yrs
      • Compensation: HK$13.57m
    • Andrew John Hunter (61yo)

      Deputy MD & Executive Director

      • Tenure: 13.1yrs
      • Compensation: HK$27.59m
    • Joanna Chen (56yo)

      Head of Business Development & Executive Director

      • Tenure: 3yrs
      • Compensation: HK$8.43m
    • Douglas Johnston (55yo)

      Chief Operating Officer and Acting Chief Executive Officer of Husky Midstream Limited Partnership

      • Tenure: 3.5yrs

    Board Members

    • Eirene Yeung (58yo)

      Company Secretary & Alternate Director

      • Tenure: 11.9yrs
    • Frank Sixt (67yo)

      Executive Director

      • Tenure: 23.7yrs
      • Compensation: HK$75.00k
    • Victor Li (55yo)

      Executive Chairman

      • Tenure: 23.7yrs
      • Compensation: HK$33.31m
    • Hing Lam Kam (73yo)

      Group MD & Executive Director

      • Tenure: 23.7yrs
      • Compensation: HK$15.97m
    • Canning Fok (68yo)

      Deputy Chairman of the Board

      • Tenure: 22.8yrs
      • Compensation: HK$75.00k
    • Dominic Chan (56yo)

      CFO & Executive Director

      • Tenure: 9yrs
      • Compensation: HK$10.47m
    • Edmond Ip (67yo)

      Deputy Chairman of the Board

      • Tenure: 16.9yrs
      • Compensation: HK$13.57m
    • Eddy Tsang (61yo)

      Chief Executive Officer of CK Infrastructure Materials

      • Tenure: 15yrs
    • Andrew John Hunter (61yo)

      Deputy MD & Executive Director

      • Tenure: 13.1yrs
      • Compensation: HK$27.59m
    • Joanna Chen (56yo)

      Head of Business Development & Executive Director

      • Tenure: 3yrs
      • Compensation: HK$8.43m

    Company Information

    CK Infrastructure Holdings Limited's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: CK Infrastructure Holdings Limited
    • Ticker: 1038
    • Exchange: SEHK
    • Founded: 1996
    • Industry: Electric Utilities
    • Sector: Utilities
    • Market Cap: HK$152.414b
    • Shares outstanding: 2.65b
    • Website: https://www.cki.com.hk

    Number of Employees


    Location

    • CK Infrastructure Holdings Limited
    • Cheung Kong Center
    • 12th Floor
    • Central
    • Hong Kong

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CKIS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 1996
    CHHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 1996
    1038SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 1996
    1038SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 1996
    1038SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 1996
    CKIS.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDNov 2008

    Biography

    CK Infrastructure Holdings Limited, an infrastructure company, develops, invests, and operates infrastructure businesses in Hong Kong, Mainland China, the United Kingdom, Continental Europe, Australia, New Zealand, and Canada. The company invests in energy infrastructure, transportation infrastructure, water infrastructure, waste management, waste-to-energy, household infrastructure, and infrastructure related businesses. It is also involved in the production and laying of asphalt; manufacture, distribution, and sale of cement; and property investment and financing businesses, as well as provision of waste management services, including waste collection, resource recovery, and disposal services. The company was formerly known as Cheung Kong Infrastructure Holdings Limited and changed its name to CK Infrastructure Holdings Limited in May 2017. The company was incorporated in 1996 and is based in Central, Hong Kong. CK Infrastructure Holdings Limited is a subsidiary of Hutchison Infrastructure Holdings Limited. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/20 12:44
    End of Day Share Price2020/01/20 00:00
    Earnings2019/06/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.