The disposal of the majority of CKH’s port business is “a surprise, given [that] most of the other ports are not in regions directly exposed to current geopolitical tensions”, JPMorgan’s analyst Karl Chan said.
“We think this might be an opportunistic deal where the initial discussion of disposing of Panama ports may expand to most remaining ports”, said Chan, who has an “overweight” recommendation on the stock. “Based on our understanding of the management philosophy of CKH, any deal is possible as long as the price is right.”
The sales proceed of US$23 billion would generate US$19 billion in cash for CKH, substantially higher than Morningstar’s US$10.5 billion valuation of its port assets. CKH shares jumped by almost a quarter in Hong Kong trading on Wednesday, their biggest intraday surge on record, to as much as HK$48.20 per share.
