On October 15, 16, 19 and 20, Li Ka Shing and his son purchased 980000 shares at an average price of HK $37.65, HK $37.545, HK $37.53 and HK $37.1880 per share. Through this increase, Li Jiacheng and Li zejus shareholding proportion in Changshi increased to 35.68% and 35.75% respectively.
According to the incomplete statistics of time finance and economics, this is more than 80 times of the Lis father and son this year. Whether in the industry or in the past, such a frequent increase in holdings are relatively rare. Huang Lichong, co-founder of the co-founder of the strategy management group, believes that they want to give their stocks some support, and now they are cheaper.
On October 23, Cheung Kong closed at HK $37.50 per share, down 30.13% from the closing price of HK $53.67/share on January 2, the first trading day of this year.
This is not the first time that Lis father and son have swept up goods. Frequent overweight actions began in March, including 6 times in March, 5 times in April, 15 times in May, 15 times in June, 1 time in July, 13 times in August, 18 times in September and 11 times in October. Through 84 increases, the shareholding ratio of Li Ka Shing and Li zeju to Changshi has increased from 33.93% and 34% to 35.68% and 35.75% at present.
From March 20, Lis father and son began to increase their holdings frequently. During the four trading days of March 20, 23, 24 and 25, the total shares increased by 16.6015 million, involving about HK $620 million. Investors seem to be buying in. The stock price of Changshi gradually rebounded, climbing to HK $40 / share on March 31 and reaching its highest value of HK $48.992 on July 6. The closing price of Changshi also reached its highest value of HK $48.79/share since March 19.
According to the incomplete statistics of time finance and economics, as of the time of publication, Li Ka Shings family has spent a total of HK $5.283 billion to increase its holdings of Changshi this year. However, it is still difficult to prevent the stock price from going down all the way. The recovery is short-lived. Since September 18, the stock price of Changshi has been delayed below HK $40.
The decline of stock price has nothing to do with performance. According to the annual report of Changshi group in 2019, its revenue in 2019 was HK $82.382 billion, up 63.56% year-on-year. However, the net profit attributable to parent decreased by 27.38% to HK $29.134 billion. In the first half of this year, affected by the epidemic situation and other factors, Changshi groups performance was even worse, with revenue of HK $36.323 billion, a year-on-year increase of 6.18%, but its net profit decreased by 57.96% to HK $6.36 billion.
Bai Wenxi, IPGs chief economist in China, believes that since this year, due to the impact of the epidemic situation and the turbulence in Hong Kong, market fundamentals are not confident enough. Lis father and son continue to increase their holdings in order to enhance market confidence and maintain the stock price of Changshi. According to Zheng Zhigang, a professor at the school of Finance and finance of Renmin University of China, in addition to sending a positive signal to the capital market and guiding investors to join the ranks of increasing holdings, the Li family and his son may also be taking advantage of the undervalued share price of Changshi to invest their surplus funds in this value depression.
Continue to sell mainland assets
The mainland business is still the main support of Changshi groups real estate income. According to the semi annual report of 2020, the real estate sales revenue recognized by Changshi in the first half of the year was HK $19.484 billion, a slight increase of 1.31%. Among them, the sales revenue of mainland property was HK $10.929 billion, with a year-on-year increase of 218.82%, and that of Hong Kong was HK $6.116 billion, a year-on-year decrease of 60.98%.
In the property sales income of Changshi group, the mainland revenue also accounted for HK $6.638 billion, accounting for 73.72%, with a year-on-year increase of nearly seven times; while that of Hong Kong was HK $1.768 billion, with a year-on-year decrease of 73.43%. Changshi said the revenue from property sales in the mainland came from a number of residential projects.
The British pub, which is expected by Changshi group, suffered the most losses. In the first half of this year, due to the spread of the epidemic, the British pubs were closed for more than three months by the British government. Greenking, the British bar and catering group of Changshi, suspended its physical business. Although it launched takeout service during the period, it still lost more than HK $1.9 billion in the first half of this year, accounting for about 30% of the groups net profit attributable to its parent.
In October, Greene king said about 26 bars and restaurants will be closed permanently and 53 bars and restaurants will be temporarily closed due to the impact of the new pneumonia epidemic and restrictive measures. About 800 employees are expected to be affected. Greene king has more than 1700 pubs in the UK and employs about 38000 people.
However, although the mainland business is a strong support for performance, Changshi has not stopped selling. On July 23 this year, Changshi sold the Chengdu Nancheng Duhui project, which has been developed for nearly 16 years, to the affiliated company of Yuzhou group at a total cost of US $1.012 billion, or about HK $7.843 billion.
Changshi mainly invests in real estate in the mainland. Li Jiacheng may judge that the property investment market in mainland China has peaked, the growth space is limited and the future trend is not clear, so it will continue to sell its domestic business. Bai Wenxi analyzed the finance and economics of the times.
Zheng Zhigang believes that in the future period of time, the stock price of Changshi may continue to be depressed. Recently, there is a lot of uncertainty in the international economic and political situation, which is extremely unfavorable to the stable expectation of investment. Therefore, many economic fields, including real estate, tend to be sluggish, and this trend tends to be relatively long-term. In addition, under the influence of many factors, Hong Kong is squeezed by many markets and is in a state of survival. The stock price of Changshi is consistent with the overall trend of real estate, and it will be in a long-term downturn in the future.