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Stocks

Hong Kong tycoon's spin-off valued at $54 billion

Cheung Kong Chairman Li Ka-shing, right, announces the reorganization of his company in Hong Kong on Jan. 9.

HONG KONG -- Cheung Kong Property Holdings is valued at 420 billion Hong Kong dollars ($54 billion), according to Monday's investor presentation for Li Ka-shing's new property unit. The company will list on the Hong Kong Stock Exchange on June 3.

     In January, the Hong Kong tycoon moved to integrate Cheung Kong (Holdings) and core unit Hutchison Whampoa through a merger as part of a broader reorganization. The resulting CK Hutchison Holdings oversees such areas as telecommunications, retail, infrastructure, energy and non-property assets, with CK Property handling the property businesses.

     Properties in Hong Kong and mainland China account for HK$269 billion and HK$138 billion, respectively. The mainland property business operates in more than 20 cities, including Beijing, Shanghai, Dalian, and Wuhan. Properties are also held in Singapore and the U.K. The company's estimated revenue in 2014 came to HK$46.6 billion, with 66% contributed by Hong Kong and 28% by mainland China. Its earnings before interests, taxes and changes in fair value reached HK$19 billion in the year.

     According to CK Property's IPO prospectus, it ranks among the top three based on property development revenue and has a market share of around 9.4% in the region.

     "The net effect is the group's overall indebtedness level and its finance costs and interest payments are expected to be lower immediately following the listing than they were prior to completion of the property businesses combination primarily because of the settlements of the amounts due to the non-property businesses," said the company.

     CK Hutchison Holdings will maintain the listing in Hong Kong, while shares of Hutchison Whampoa will stop trading after May 26.

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