Swire can afford to be optimistic about China
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Updates to add chart.
By Chan Ka Sing
HONG KONG, Aug 15 (Reuters Breakingviews) -Swire Pacific 0019.HK is doubling down in China while others de-risk. Having survived wars and worse times over the past 200 years, the investment plans of the Anglo-Asian conglomerate are worth paying attention to.
The group, led by Chair Guy Bradley, is one of the few remaining “hongs”, or Hong Kong trading houses. The main family vehicle is the closely held John Swire & Sons in London, which in turn controlsthe $11 billion Swire Pacific. The empire spans Hong Kong shopping malls to private hospitals and Coca-Cola bottling plants in China.
Swire's Hong Kong-based airline, Cathay Pacific 0293.HK, last week outlined plans to spend more than HK$100 billion ($12.8 billion) in the next seven years on its fleet, airport lounges and more. Having just bought back the remaining preference shares issued to the Hong Kong government as part of a pandemic bailout, Cathay appears keen to repay the favour by showing more commitment in the finance hub, though that outlay is slightly lower than its annual run rate for capital expenditure in 2019.
More eye-catching is Swire's commitment to property. Under another HK$100 billion investment plan announced in 2022, Swire Properties 1972.HK will pump most of that into Hong Kong and China through 2032. That makes Swire arguably the most bullish foreign developer in the country’s slumping property market. By 2032, its commercial property portfolio in China will almost double to over 18 million square feet. In comparison, CK Asset 1113.HK, the property and infrastructure empire founded by Hong Kong’s richest man Li Ka-shing, operates less than five million square feet of investment properties in the mainland.
As written into its company name, Swire focuses on Asia Pacific, and that leaves it pretty well tied to China. Though from a stock price perspective, it is also faring better than its peers, so the group has reason to be optimistic. Swire's ordinary shares are flat over the past five years, supported by buybacks,compared to 30%-plus declines from the Hang Seng Index .HSI and for Li's flagship company CK Hutchison 0001.HK.
Trading houses such as Swire were once seen symbols of British colonial power and they trailed while local tycoons like the Li's thrived, but Beijing might now desire to support the "hongs". China is trying to court foreign investment to spur its ailing $17 trillion economy amid escalating Sino-American trade tension. Not many foreign firms dare to think big in China at this point, but few are better-placed than Swire to size up the risks and the potential returns.
CONTEXT NEWS
Swire Pacific’s Hong Kong-based aviation unit Cathay Pacific said on Aug. 7 it will invest more than HK$100 billion ($12.8 billion) over the next seven years to improve its fleet and other facilities.
($1 = 7.7887 Hong Kong dollars)
Swire Pacific is outperforming in Hong Kong https://www.reuters.com/graphics/BRV-BRV/mypmargbgpr/chart.png
Editing by Una Galani and Katrina Hamlin
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
