Originally created as a pure-play property development and management company (primarily from CK Hutchison (OTCPK:CKHUY), CK Asset Holdings (OTCPK:CHKGF) (1113.HK)
has since elected to abandon the pure-play property strategy and is
instead essentially “re-comglomerating” itself into a more diverse
company with a growing array of income-producing non-property assets.
Unfortunately, management doesn’t really have a demonstrated track
record here and the company’s transition process is lumpy – property
still generates the large majority of earnings, but the land bank is
dwindling and there’s no real visibility as to what sort of
income-producing assets will come into the mix in the coming years.
CK Asset hasn’t earned back any real benefit of the doubt, and the shares are down about 5% from my last report
on the company. Although I do think CK Asset looks undervalued, there’s
huge modeling uncertainty, since so much of the company’s long-term
earnings-producing asset base isn’t even owned by CK Asset today. Buying
in today could lead to significant gains in the future, but that’s
really just a gamble/speculation on the management team at this point,
and that’s not really my preferred investing approach.
Read the full article here:
CK Asset Holdings's Strategic Shift Has The Shares Trading In No Man's Land
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