放眼環球 基建世界 二零二四年年報 環球基建 業界翹楚 目錄 長江基建是全球最大型環球基建集團之一， 透過於世界各地的基建投資，致力締造更美好的 世界。長江基建的多元化業務包括：能源基建、 交通基建、水處理基建、廢物管理、轉廢為能、 屋宇服務基建及基建相關業務。集團的投資及 營運範圍遍及香港、中國內地、英國、歐洲大陸、 澳洲、新西蘭、加拿大及美國。 | 005 | 十年財務摘要 | | --- | --- | | 006 | 董事會主席報告 | | 012 | 集團董事總經理報告 | | 019 | 長遠發展策略 | | 020 024 | 獎項 業務回顧 | | | 026 投資於電能實業 028 英國基建投資 | | | 038 澳洲基建投資 048 新西蘭基建投資 | | | 051 歐洲大陸基建投資 | | | 054 加拿大基建投資 058 香港及中國內地基建投資 | | 060 | 財務概覽 | | 062 | 董事及集團要員 | | 077 | 董事會報告 | | 090 | 董事責任聲明 | | 091 | 獨立核數師報告 | | 095 | 綜合收益表 | | 096 | 綜合全面收益表 | ...

Financial Performance - CK Infrastructure Holdings Limited reported a net profit of HKD 8.115 billion for the year ending December 31, 2024, representing a 1% increase compared to the previous year[4]. - The company achieved a strong operational profit growth of 10% from its regulated projects and long-term contracts[4]. - The UK business segment contributed HKD 3.981 billion in profit, a 31% increase year-on-year (27% increase in local currency) due to strong performance across regulated operations[9]. - The Australian business segment reported a profit contribution of HKD 1.784 billion, a decrease of 4% year-on-year, primarily due to increased tax expenses from new capital rules[14]. - The European business segment's profit contribution grew by 13% to HKD 670 million, driven by strong performance from ista[17]. - The profit contribution from Canadian operations decreased by 19% to HKD 524 million, with a local currency decline of 18%, primarily due to a significant drop in Canadian Power profits and new financing cost restrictions[19]. - The New Zealand operations reported a profit contribution of HKD 185 million, an increase of 10% year-on-year, driven by strong performance from Enviro NZ[21]. - The Hong Kong and mainland China operations contributed HKD 132 million in profit, reflecting a 13% increase compared to the previous year, with higher profit contributions from the concrete business[24]. - The company's revenue for the year ended December 31, 2024, was HKD 38,985 million, a slight increase of 1.05% from HKD 38,582 million in 2023[52]. - The profit attributable to shareholders increased to HKD 8,115 million, up 1.09% from HKD 8,027 million in 2023[52]. - Earnings per share for the year were HKD 3.22, up from HKD 3.19 in 2023, indicating a growth of 0.94%[66]. Dividends - The company proposed a final dividend of HKD 1.86 per share, bringing the total dividend for the year to HKD 2.58, an increase of 0.8% from the previous year[6]. - The interim dividend paid was HKD 0.72 per share, compared to HKD 0.71 per share in 2023, marking an increase of 1.41%[67]. - The proposed final dividend is HKD 1.86 per share, slightly up from HKD 1.85 per share in 2023, which is a 0.54% increase[67]. Financial Position - As of December 31, 2024, the company held cash of HKD 8 billion, with a net debt to total capital ratio of 7.8%, indicating a strong financial foundation[25]. - The company has maintained an "A/stable" credit rating from Standard & Poor's, reflecting its robust financial position[26]. - The group's net debt to total equity ratio was 7.8%, compared to 7.7% at the end of 2023, with net debt of HKD 11.136 billion and total equity of HKD 142.379 billion[35]. - The net debt to total equity ratio, when adjusted for the infrastructure investment portfolio, was 47%, with net debt of HKD 116.582 billion and total equity of HKD 247.825 billion, up from 46.4% at the end of 2023[35]. - The group had a total nominal amount of HKD 51.014 billion in derivative instruments as of December 31, 2024, to hedge against currency and interest rate risks[35]. - Certain assets were pledged to secure bank loans totaling HKD 1.388 billion as of December 31, 2024[36]. - The group reported contingent liabilities amounting to HKD 168 million, including performance guarantees of HKD 144 million and subcontractor guarantees of HKD 24 million[37]. - The group employed 2,358 staff members, with employee expenses (excluding director remuneration) amounting to HKD 1.072 billion[38]. Operational Developments - CK Infrastructure completed several acquisitions, including Phoenix Energy and UK Renewables Energy, which immediately contributed to revenue post-transaction[4]. - The company is enhancing network reliability and safety in Australia, with significant upgrades planned for the electricity supply systems[15]. - The company is actively pursuing new investment opportunities in the sustainable development sector, including renewable energy and decarbonization projects[28][29]. - The company extended the energy supply agreement for the Meridian Cogeneration Plant to provide power to SaskPower and thermal energy to Cenovus until 2049[19]. - The company anticipates a cautious but optimistic outlook for business prospects in 2025, despite ongoing global uncertainties and geopolitical tensions[30]. - The company has successfully signed multiple commercial contracts in New Zealand, including significant projects for sludge disposal and hazardous waste treatment[23]. Governance and Compliance - The company adhered to the corporate governance code and principles, ensuring high standards of governance and accountability[41]. - The audit committee, composed entirely of independent non-executive directors, reviewed the group's performance for the year ending December 31, 2024[43]. - The annual general meeting for the fiscal year 2025 is scheduled for May 21, 2025[47]. Other Financial Metrics - Infrastructure investment sales and interest income decreased to HKD 4,993 million, down 16.67% from HKD 5,990 million in 2023[52]. - Total non-current assets decreased to HKD 148,365 million from HKD 151,286 million in 2023, reflecting a decline of 1.93%[54]. - The company's total liabilities decreased from HKD 16,503 million in 2023 to HKD 15,396 million in 2024, a reduction of 6.71%[54]. - The total equity attributable to shareholders decreased to HKD 121,280 million from HKD 123,293 million, a decline of 1.64%[54]. - Other income, primarily from bank interest, decreased to HKD 467 million from HKD 616 million, a drop of 24.19%[58]. - Operating costs were reduced to HKD 4,150 million from HKD 4,257 million, a decrease of 2.51%[52]. - The company reported a foreign exchange gain of HKD 113 million, down from HKD 572 million in 2023, a decline of 80.24%[52]. - The pre-tax profit for the year was HKD 8,671 million, compared to HKD 8,578 million in 2023, showing an increase of 1.09%[64]. - The group’s financing costs were HKD 865 million, an increase from HKD 769 million in 2023, reflecting a rise of 12.5%[64].

Investment Rating - The report maintains an "Outperform" rating for CK Infrastructure Holdings [3][12]. Core Insights - The company completed its secondary listing on the London Stock Exchange and is accelerating its M&A activities, including the acquisition of Phoenix Energy and several renewable energy assets [11][12]. - The first half of 2024 saw a profit of HK$4.577 billion, a year-on-year increase of 1.46%, with significant contributions from joint ventures [9][10]. - The target price has been raised to HK$61.37, reflecting a PE ratio of 19 times for 2024, based on expected net profits of HK$8.458 billion, HK$8.764 billion, and HK$8.825 billion for 2024-2026 [12]. Financial Performance - Revenue for 2024 is projected at HK$7.537 billion, with a slight increase of 2% compared to the previous year [4][8]. - Net profit is expected to grow from HK$8.027 billion in 2023 to HK$8.458 billion in 2024, representing a 5% increase [4][8]. - The gross profit margin (GPM) is forecasted to remain stable around 88.8% for 2024 [4][8]. Segment Performance - The UK segment reported a profit of HK$1.865 billion, up 17% year-on-year, driven by lower financing costs [10]. - The Canadian segment experienced a profit decline of 25% to HK$301 million due to falling electricity prices [10]. - The Australian segment's profit increased by 5% to HK$864 million, while the New Zealand segment rose by 11% to HK$80 million [10]. M&A Activities - The company has accelerated its M&A activities, including the acquisition of a solar power station and multiple wind farm assets in the UK, with an estimated investment of HK$3.5 billion [11][12]. - The acquisition of Phoenix Energy, Northern Ireland's largest gas distribution network, was completed at a valuation of HK$7.4 billion [11].

Financial Performance - For the six months ended June 30, 2024, the group recorded a profit attributable to shareholders of HKD 4.311 billion, an increase of 2% compared to the same period last year[9]. - The board announced an interim dividend of HKD 0.72 per share, up 1.4% from HKD 0.71 per share in the previous year[10]. - The profit contribution from the Australian infrastructure business was HKD 864 million, an increase of 5% compared to the same period last year[14]. - The profit contribution from the Canadian infrastructure business was HKD 301 million, a decrease of 25% year-on-year, primarily due to the absence of high electricity prices seen in the previous year[17]. - The profit contribution from the New Zealand infrastructure business increased by 11% to HKD 80 million, with a 13% increase in local currency[18]. - The profit contribution from the Hong Kong and mainland China business was HKD 96 million, a decline of 6% year-on-year, attributed to low traffic volume on toll roads and low prices and sales in the construction materials sector[19]. - Revenue for the six months ended June 30, 2024, was HKD 19,090 million, a decrease of 2.3% from HKD 19,534 million in 2023[40]. - Profit before tax for the same period was HKD 4,577 million, up 1.5% from HKD 4,509 million in 2023[40]. - Net profit attributable to shareholders was HKD 4,311 million, an increase of 1.7% compared to HKD 4,239 million in 2023[40]. - Earnings per share for the period was HKD 1.71, compared to HKD 1.68 in 2023, reflecting a growth of 1.8%[40]. - Total comprehensive income for the six months was HKD 2,966 million, down from HKD 8,368 million in 2023, indicating a significant decline[41]. - The company reported a foreign exchange loss of HKD 1,339 million, compared to a gain of HKD 3,424 million in the previous year[41]. Investments and Acquisitions - UK Power Networks acquired a renewable energy asset portfolio with a total installed capacity of approximately 69 MW, primarily from solar generation, enhancing the group's renewable energy capacity[12]. - In April 2024, the company completed the acquisition of Phoenix Energy, Northern Ireland's largest gas network, with an enterprise value of approximately HKD 7.4 billion, providing stable cash flow and recurring profits[13]. - The company announced an agreement to acquire a UK onshore wind asset portfolio for approximately GBP 350 million (about HKD 3.5 billion), which includes 32 wind farms with a total installed capacity of 175 MW[22]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[35]. Financial Position and Debt Management - As of June 30, 2024, the company held cash of HKD 9.2 billion, with a net debt to total net capital ratio of 9.8%[20]. - The company received a credit rating of "A / Stable" from Standard & Poor's in February 2024[20]. - As of June 30, 2024, the total cash and deposits of the group amounted to HKD 91.8 billion, while total loans were HKD 234 billion, including HKD 26.7 billion in HKD loans and HKD 207.2 billion in foreign currency loans[24]. - The net debt to total net capital ratio was 9.8%, up from 7.7% at the end of 2023, primarily due to investments in a Northern Ireland gas network operator[24]. - The net cash used in financing activities for the six months ended June 30, 2024, was HKD (4,981) million, compared to HKD (7,716) million in the previous year, indicating a decrease in cash outflow by 35.5%[47]. - The company’s bank and other loans increased significantly to HKD 13,165 million from HKD 9,024 million, an increase of 46.5%[42]. Operational Efficiency and Cost Management - The company has achieved a 20% reduction in operational costs through efficiency improvements and restructuring initiatives[34]. - Operating costs for the six months ended June 30, 2024, were HKD 1,431 million, down from HKD 1,506 million in 2023, reflecting a reduction of 5.0%[52]. - The company reported a 5% increase in gross margin, reaching 40% for the quarter, driven by improved operational efficiencies[36]. Market Expansion and Growth Strategy - Future outlook indicates a projected revenue growth of 10% for the next fiscal year, driven by new product launches and market expansion strategies[32]. - Market expansion efforts include entering three new international markets, expected to contribute an additional $50 million in revenue by the end of the fiscal year[34]. - The company plans to enhance its digital marketing efforts, allocating an additional $10 million to increase brand visibility and customer engagement[32]. - The company plans to continue its market expansion and focus on new product development in the upcoming quarters[40]. Sustainability and Corporate Governance - The management team emphasizes a focus on sustainability initiatives, aiming for a 25% reduction in carbon emissions by 2025[34]. - The company has a sustainability committee to oversee and provide advice on sustainability initiatives and related policies[96]. - The company has implemented comprehensive corporate governance policies, including anti-fraud and anti-bribery measures, to ensure accountability and transparency[88]. - The board is responsible for establishing and monitoring corporate culture, long-term strategic goals, and risk management practices[89]. Risks and Challenges - The global economic environment remains uncertain due to trade protectionism, currency fluctuations, and high inflation pressures, which may impact the group's business and financial performance[102]. - The group faces risks related to economic conditions and interest rates, which may adversely affect its financial status and operational performance[103]. - The company is exposed to risks related to compliance with personal data protection laws, which may lead to regulatory actions or civil claims if not adhered to[117]. - The company must navigate cultural differences and regulatory approvals when pursuing international mergers and acquisitions, which may delay or complicate transactions[115]. - The group faces inherent operational risks in its power generation, distribution, and gas supply businesses, which may adversely affect operational performance and reputation[118]. Shareholder Information - The company has maintained a consistent number of issued shares at 2,519,610,945 for both 2023 and 2024, ensuring stability in earnings per share calculations[58]. - The interim dividend declared is HKD 0.72 per share for the six months ended June 30, 2024, up from HKD 0.71 per share in 2023, totaling HKD 1.814 billion compared to HKD 1.789 billion[59]. - Li Ka-Shing holds a total of 5,655,000 shares in the company, representing approximately 0.22% of the total equity[75].

Financial Performance - CK Infrastructure Holdings Limited reported a profit attributable to shareholders of HKD 4.31 billion for the six months ended June 30, 2024, representing a 2% increase compared to the same period last year[1]. - The interim dividend declared is HKD 0.72 per share, up 1.4% from HKD 0.71 per share in the previous year[1]. - The company's unaudited profit attributable to shareholders for the six months ended June 30, 2024, was HKD 4.31 billion, representing an increase from HKD 4.24 billion in the same period of 2023[22]. - Earnings per share for the period was HKD 1.71, compared to HKD 1.68 for the previous year, reflecting a growth of approximately 1.8%[23]. - Total revenue for the six months was HKD 19.09 billion, a decrease of 2.3% from HKD 19.53 billion in the prior year[23]. - The total comprehensive income for the period was HKD 2.97 billion, a significant decrease from HKD 8.37 billion in the previous year[24]. - The company reported a total comprehensive income of HKD 2,966 million for the six months ended June 30, 2024, compared to HKD 8,368 million for the same period in 2023, indicating a decline of approximately 64%[27]. - Profit attributable to shareholders for the period was HKD 4,524 million, compared to HKD 4,459 million in the same period last year, an increase of 1.5%[36]. Business Contributions - Power Assets Holdings contributed HKD 10.82 billion in profit, a 2% increase year-on-year, with a new gas generator contract signed in April as part of the transition away from coal by 2035[2]. - The UK infrastructure business contributed HKD 18.65 billion in profit, a 17% increase year-on-year, driven by revenue growth and reduced financial costs[3]. - The Australian infrastructure portfolio contributed HKD 864 million in profit, a 5% increase year-on-year, with all business segments showing revenue growth[5]. - The New Zealand business saw an 11% increase in profit contribution to HKD 80 million, with strong performance from Enviro NZ[8]. - The Hong Kong and mainland China business contributed HKD 96 million, a 6% decrease year-on-year, due to low traffic volume on toll roads and weak pricing in the construction materials sector[9]. Financial Position - As of June 30, 2024, the company held cash of HKD 9.2 billion, with a net debt to total capital ratio of 9.8%, indicating a strong financial foundation[10]. - The group's total cash and deposits amounted to HKD 9.18 billion, while total loans were HKD 23.4 billion, with 35% of repayments due in 2024[14]. - The net debt to total net capital ratio was 9.8% as of June 30, 2024, an increase from 7.7% at the end of 2023, primarily due to investments in a Northern Ireland gas network operator[14]. - The company's total equity decreased to HKD 131,354 million as of June 30, 2024, down from HKD 133,271 million as of December 31, 2023, reflecting a decline of approximately 1.4%[25]. - The company's total liabilities increased to HKD 42,641 million as of June 30, 2024, compared to HKD 25,522 million at the end of 2023, reflecting a significant increase of approximately 67%[25]. Investments and Acquisitions - The acquisition of Phoenix Energy in Northern Ireland, valued at approximately HKD 7.4 billion, covers 78% of the gas pipeline network and serves 48% of the population[4]. - CK Infrastructure announced an agreement to acquire a UK onshore wind asset portfolio for approximately £350 million (around HKD 3.5 billion), marking the third acquisition in 2024[12]. - The acquired portfolio includes 32 wind farms with a total installed capacity of 175 MW and a net equity capacity of 137 MW, expected to provide stable cash flow and recurring profit contributions[12]. - The group is exploring acquisition opportunities in the infrastructure sector, leveraging strong recurring income and predictable cash flow[13]. Operational Efficiency - The group's operating costs decreased to HKD 1.92 billion from HKD 2.11 billion, marking a reduction of approximately 9.0%[23]. - The group's financing costs increased to HKD 415 million from HKD 370 million, indicating a rise of about 12.1%[23]. - The group employed 2,408 staff, with employee expenses (excluding directors' remuneration) totaling HKD 520.1 million[17]. - The group has capital commitments of HKD 309 million as of June 30, 2024, up from HKD 273 million as of December 31, 2023[46]. Risk Management - The group has established several interest rate swap contracts to mitigate interest rate risks, with a total nominal amount of HKD 52.69 billion as of June 30, 2024[14]. - The group maintains a prudent financial strategy, balancing sustainable profit growth with ideal debt levels[13]. Corporate Governance - The company maintained high standards of corporate governance and ethical standards throughout the reporting period[19]. - The audit committee reviewed the interim results for the six months ended June 30, 2024, ensuring compliance with relevant regulations[19].

Financial Performance - CK Infrastructure recorded a net profit of HKD 8,027 million for the year ended December 31, 2023, representing a 4% increase compared to the previous year, and a 12% increase when excluding one-time gains from the sale of Northumbrian Water in 2022[8]. - Operating cash flow reached a historical high of HKD 8,600 million, reinforcing the company's strong revenue base[9]. - The company held cash reserves of HKD 13,000 million as of December 31, 2023, with a net debt to total capital ratio of 7.7%[9]. - The total assets of CK Infrastructure amounted to HKD 165,873 million, with total liabilities of HKD 32,602 million[6]. - The company’s earnings per share for 2023 was HKD 3.19, an increase from HKD 3.08 in 2022[6]. - CK Infrastructure's credit rating was reaffirmed as "A/Stable" by Standard & Poor's, indicating strong financial stability[9]. - The company’s equity attributable to shareholders increased to HKD 123,293 million, up from HKD 119,393 million in the previous year[6]. Dividend Policy - CK Infrastructure's board proposed a final dividend of HKD 4,661 million, maintaining a consistent dividend policy[5]. - The proposed final dividend is HKD 1.85 per share, resulting in a total annual dividend of HKD 2.56, an increase of 1.2% compared to 2022, marking 27 consecutive years of dividend growth since the company's listing[10]. - CK Infrastructure has maintained a continuous dividend growth for 27 years since its listing in 1996, marking a significant achievement in shareholder returns[21]. - CK Infrastructure's strategy includes acquiring quality businesses that provide stable recurring returns and fostering internal growth within its member companies[26]. Operational Highlights - The company’s diversified operations include energy infrastructure, transportation infrastructure, water treatment, and waste management across multiple regions including Hong Kong, mainland China, the UK, and Australia[2]. - CK Infrastructure continues to seek growth opportunities despite global market uncertainties, including geopolitical tensions and inflationary pressures[7]. - The company is focusing on sustainable development and decarbonization, with projects including smart grids, electric vehicle charging, and renewable energy integration[19]. - The company plans to explore new investment opportunities in the global decarbonization sector as part of its overall business development strategy[19]. Profit Contributions by Region - Power Assets' profit contribution was HKD 2.16 billion, representing a growth of 6%[11]. - The profit contribution from UK operations was HKD 3.05 billion, remaining stable year-on-year, but down 22% in local currency terms; excluding a one-time gain from the sale of Northumbrian Water in 2022, the growth rate would be in double digits[12]. - The profit contribution from Australian operations was HKD 1.855 billion, a decrease of 6% year-on-year, primarily due to currency weakness and regulatory resets affecting AGN and Multinet Gas Networks[13]. - The profit contribution from Canadian operations increased by 5% to HKD 648 million, with a 10% increase in local currency terms[16]. - The profit contribution from New Zealand operations was HKD 168 million, an increase of 1% year-on-year, with a 3% increase in local currency terms[17]. - The profit contribution from Hong Kong and mainland China operations was HKD 117 million, a decline of 40% due to significant reductions in construction activity in China[18]. Corporate Governance and Leadership - The company has a strong leadership team with extensive experience in finance and management, including members with over 43 years of experience in accounting and finance[139]. - The company has a diverse board with members holding advanced degrees in economics, law, and engineering, contributing to its strategic decision-making[144]. - The company emphasizes corporate governance, with several executives being members of professional accounting and governance associations[147]. - The company has made strategic appointments, such as the CEO of Husky Midstream, to enhance its position in the energy sector[151]. Sustainability and Environmental Initiatives - The company is focused on environmental sustainability and aims to lead the industry in net-zero energy systems through strategic evolution and investment in new infrastructure projects[45]. - The group is committed to reducing Scope 1 and Scope 2 emissions to half of 2020 levels by 2035 and achieving net-zero emissions by 2050[172]. - The group has implemented a biodiversity policy to enhance environmental protection and integrate sustainability into all operational levels[172]. - The group aims to leverage emerging market opportunities related to sustainable development and energy transition[172]. Acquisitions and Growth Strategy - The company is actively pursuing opportunities for acquisitions while adhering to strict investment criteria to optimize risk-adjusted returns[43]. - The company has expanded its global footprint since entering the Australian market in 1999, becoming one of the largest overseas investors in several countries[23]. - The company emphasizes prudent financial management and aims to balance growth with maintaining an ideal debt level[20]. Employee Engagement and Corporate Culture - The company has a unique corporate culture driven by over 30,000 dedicated employees, which is considered a key asset in its growth strategy[27]. - The group emphasizes employee development through comprehensive training programs and clear career paths to adapt to a changing industry environment[174]. - The company promotes a corporate culture focused on health, safety, creativity, and innovation among its employees[46]. Regulatory and Compliance - The group faces regulatory compliance across various jurisdictions, ensuring adherence to local laws and regulations[173]. - The Hong Kong government completed a mid-term review of the regulatory framework for the electricity sector, providing a stable and predictable return mechanism for the industry, with HKD 22 billion committed for carbon reduction investments from 2024 to 2028[60]. - UK Power Networks entered a new regulatory period (RIIO-ED2) that will last until March 2028, with stable operational performance and cost control from Northern Gas Networks and Wales & West Utilities[60].

Financial Performance - CK Infrastructure Holdings Limited reported a net profit of HKD 8 billion for the year ending December 31, 2023, representing a 4% increase year-on-year. Excluding one-time gains from the sale of Northumbrian Water in 2022, net profit increased by 12%[4]. - The company's revenue for the year ended December 31, 2023, was HKD 38,582 million, a decrease of 1.7% from HKD 39,236 million in 2022[30]. - The operating profit before tax was HKD 8,578 million, representing an increase of 3.4% compared to HKD 8,294 million in the previous year[30]. - The net profit attributable to shareholders was HKD 8,027 million, up 3.6% from HKD 7,748 million in 2022[30]. - Earnings per share for the year was HKD 3.19, compared to HKD 3.08 in the previous year, reflecting a growth of 3.6%[30]. - The annual profit attributable to shareholders for 2023 was HKD 2,162 million, compared to HKD 2,033 million in 2022, representing an increase of 6.3%[38]. - Earnings per share for 2023 were HKD 8.07, up from HKD 7.74 in 2022[40]. Dividends - The board proposed a final dividend of HKD 1.85 per share, bringing the total dividend for 2023 to HKD 2.56 per share, a 1.2% increase from 2022, marking 27 consecutive years of dividend growth[6]. - Total dividends declared for 2023 reached HKD 6,450 million, an increase from HKD 6,221 million in 2022[41]. - The proposed final dividend for 2023 is HKD 1.85 per share, compared to HKD 1.83 per share in 2022[41]. Cash Flow and Financial Position - Operating cash flow reached a historical high of HKD 8.6 billion, reinforcing the company's strong revenue base[5]. - The company maintained a strong financial position with cash holdings of HKD 13 billion and a net debt to total capital ratio of 7.7% as of December 31, 2023[5]. - The total cash and deposits of the group as of December 31, 2023, amounted to HKD 13.077 billion, while total loans were HKD 24.199 billion[19]. - The net debt to total net capital ratio was 7.7% as of December 31, 2023, compared to 7.3% at the end of 2022[19]. - The group has secured HKD 1.555 billion in bank loans against certain assets as of December 31, 2023[20]. - The group is in discussions with several banks regarding the refinancing of loans due in 2024, with progress being favorable[19]. - The group maintains a balanced approach between prudent financial management and growth, ensuring sustainable profit growth while keeping debt levels manageable[18]. Business Contributions - The contribution from Power Assets Holdings was HKD 2.16 billion, reflecting a 6% increase[7]. - The UK infrastructure business contributed HKD 3.05 billion, remaining stable year-on-year, but showed a 22% decrease in local currency terms[8]. - The Australian infrastructure business reported a profit contribution of HKD 1.8555 billion, a 6% decrease year-on-year, primarily due to currency weakness and regulatory resets[10]. - The European infrastructure business saw a profit contribution of HKD 535 million, down 19% year-on-year, attributed to a fire incident at Dutch Enviro Energy's Rozenburg facility[12]. - The Canadian infrastructure business experienced a 5% increase in profit contribution to HKD 648 million, with significant recovery in Park'N Fly's business post-COVID[13]. - The Hong Kong and mainland China business reported a profit contribution of HKD 117 million, a 40% decrease year-on-year, due to reduced construction activity in China[15]. Assets and Liabilities - The total non-current assets increased to HKD 151,286 million in 2023 from HKD 146,342 million in 2022, marking a growth of 3.2%[31]. - Current liabilities rose significantly to HKD 16,099 million in 2023 from HKD 12,268 million in 2022, an increase of 31.5%[31]. - The company's total assets less current liabilities decreased to HKD 149,774 million in 2023 from HKD 153,599 million in 2022, a decline of 2.5%[31]. - The equity attributable to shareholders increased to HKD 123,293 million in 2023 from HKD 119,393 million in 2022, reflecting a growth of 3.2%[31]. Operational Efficiency - Operating costs decreased from HKD 1,952 million in 2022 to HKD 1,628 million in 2023 for the cost of goods sold, reflecting a reduction of approximately 16.6%[35]. - The company reported a decrease in depreciation and amortization costs from HKD 342 million in 2022 to HKD 325 million in 2023[38]. - The company reported a significant increase in interest income from joint ventures, which was HKD 1,993 million in 2023 compared to HKD 2,361 million in 2022, a decrease of 15.5%[33]. - The revenue from waste management services increased to HKD 1,992 million in 2023, up from HKD 1,901 million in 2022, indicating a growth of 4.8%[33]. - Other income for 2023 includes bank interest income of HKD 616 million, a significant increase from HKD 203 million in 2022[34]. Risk Management - The group has a prudent treasury policy to manage risks and reduce funding costs, with most cash held in short-term deposits in various currencies[19]. - The group has established several interest rate swap contracts to mitigate interest rate risks as of December 31, 2023, with a total nominal amount of HKD 55.923 billion[19]. Staffing and Expenses - The group employs 2,407 staff members, with employee expenses (excluding director remuneration) totaling HKD 1.03 billion[22]. Audit and Compliance - The audit committee has reviewed the annual performance for the year ending December 31, 2023[45]. - Deloitte has confirmed that the preliminary announcement of the consolidated financial statements is consistent with the audited financial statements approved by the board on March 20, 2024[45].

Investment Rating - The report initiates coverage with an "OUTPERFORM" rating for CK Infrastructure Holdings, with a target price of HK$52.85, compared to the current price of HK$46.00 [3][5]. Core Insights - CK Infrastructure Holdings is recognized as a top performer in overseas infrastructure investment, characterized as a cash cow with a steadily increasing dividend [2][5]. - The company has a diversified portfolio across various regions, with significant investments in the UK, Australia, Europe, New Zealand, Canada, and the US [5][8]. - The financial health of the company is robust, with a stable cash dividend growth and a low debt ratio, maintaining a net asset liability ratio of around 25% [5][11]. Summary by Sections Overview of the Company - CK Infrastructure Holdings was established in May 1996 and focuses on infrastructure sectors such as power distribution, gas networks, transportation, water services, and waste-to-energy [5][8]. - The company is primarily owned by Cheung Kong Holdings, which holds a 75.67% stake [8]. Financial Performance - For the first half of 2023, the company reported revenue of HK$32.17 billion, a decrease of 6% year-on-year, while net profit was HK$42.39 billion, down 4% [5][10]. - The UK segment contributed the most to revenue, accounting for 36% of total income [5][10]. - The company maintains a high dividend payout ratio of around 80%, with an average dividend yield of 4.1% [5][11]. Business Segments - The UK and Europe segment includes major investments such as UK Power Networks and Northern Gas Networks, contributing significantly to profitability [16][18]. - The Australian segment includes SA Power Networks and various renewable energy projects, while the Canadian segment has shown strong growth with a 31% increase in profit contribution [22][23]. - The mainland China and Hong Kong segment has seen a decline in profitability due to reduced traffic on toll roads and lower demand for cement [26]. Regulatory Environment - The report discusses the completion of the reset of price control rules in the UK, which is expected to have a smaller-than-anticipated impact on profitability [27][30]. - The new RIIO-ED2 price control mechanism, effective from 2023 to 2028, sets a capital return rate of 3.9%, lower than the previous rate of 4.4% [30][31]. Profit Forecast and Valuation - The forecast for FY24-26 anticipates revenues of HK$72.03 billion, HK$74.17 billion, and HK$75.09 billion, with corresponding net profits of HK$78.18 billion, HK$84.17 billion, and HK$85.07 billion [5][10]. - The report employs a DCF valuation method, resulting in a target price of HK$52.85 per share, reflecting a PE ratio of 15.82 for 2024 [5][10].

Core Viewpoint - UBS maintains a positive outlook on Cheung Kong Infrastructure Holdings (01038) regarding its UK assets, upgrading the target price from HKD 48 to HKD 51, reflecting favorable exchange rate factors [1] Financial Projections - Earnings estimates for 2023 to 2025 have been raised by 4%, 4%, and 1% respectively, due to more favorable exchange rate conditions than previously anticipated [1] - The expected return on assets (ROA) for the company is projected to increase from 3% to between 4.2% and 4.3% following the recent regulatory reset announced in mid-August [1] Market Performance - Since the announcement of the regulatory reset in the UK, Cheung Kong's stock has outperformed the Hang Seng Index by 16% [1] - Nearly half of the company's net profit contribution comes from its operations in the UK [1]

Financial Performance - For the six months ended June 30, 2023, the company recorded a profit attributable to shareholders of HKD 4,239 million, a decrease of 4% year-on-year[10]. - The earnings per share for the period was HKD 1.68, and the interim dividend declared was HKD 0.71 per share, representing a 1.4% increase from the previous year[11]. - The contribution from Power Assets was HKD 1,066 million, an increase of 3% compared to the same period last year[12]. - The UK infrastructure business contributed HKD 1,592 million, down 5% year-on-year, affected by regulatory resets and currency fluctuations[13]. - Australia's infrastructure business reported a profit contribution of HKD 826 million, a decrease of 18% year-on-year, primarily due to regulatory resets affecting AGN and Multinet Gas, a one-time gain from United Energy last year, and a weak AUD to HKD exchange rate[15]. - The profit contribution from the European infrastructure business was HKD 424 million, down 1% year-on-year, impacted by a weak Euro and rising financial costs; in local currency, the profit contribution remained stable compared to the previous year[16]. - Canada's infrastructure business saw a profit contribution of HKD 402 million, an increase of 31% year-on-year, driven by strong performance from Canadian Power and Park'N Fly, with a 40% increase in local currency[17]. - New Zealand's infrastructure business reported a profit contribution of HKD 72 million, down 5% year-on-year, attributed to a weak NZD to HKD exchange rate; in local currency, the profit contribution increased by 2%[18]. - The profit contribution from Hong Kong and mainland China was HKD 102 million, a decrease of 13%, due to reduced traffic on toll roads in mainland China and declining sales in Hong Kong's cement business[19]. - Revenue for the six months ended June 30, 2023, was HKD 19,534 million, a decrease of 2.7% compared to HKD 20,079 million in 2022[39]. - Profit attributable to shareholders for the same period was HKD 4,239 million, down 3.9% from HKD 4,409 million in 2022[39]. - Earnings per share decreased to HKD 1.68 from HKD 1.75, reflecting a decline of 4%[39]. - Total comprehensive income for the period was HKD 8,368 million, an increase of 15.4% compared to HKD 7,252 million in 2022[40]. Dividends and Shareholder Returns - The interim dividend will be distributed on September 13, 2023, to shareholders registered by September 4, 2023[11]. - The company paid dividends amounting to HKD 4,611 million during the six months ended June 30, 2023, compared to HKD 4,560 million in the same period of 2022[43]. - The interim dividend declared was HKD 0.71 per share, an increase from HKD 0.70 per share in the same period of 2022, totaling HKD 1,789 million compared to HKD 1,764 million[56]. Financial Position and Capital Management - The group maintained a strong financial position with cash holdings of HKD 12 billion and a net debt to total capital ratio of 9% as of June 30, 2023, allowing for ample financial resources to seek new growth opportunities[19]. - As of June 30, 2023, the total cash and deposits of the group amounted to HKD 12.05 billion, while the total loans were HKD 25.67 billion, including HKD 2.67 billion in HKD loans and HKD 22.93 billion in foreign currency loans[22]. - The net debt to total net capital ratio was 9% as of June 30, 2023, slightly higher than the 7% level at the end of 2022, calculated based on net debt of HKD 13.55 billion and total net capital of HKD 146.47 billion[22]. - The group has a total nominal amount of derivative instruments of HKD 53.61 billion as of June 30, 2023, to hedge against interest rate risks[22]. - The group has pledged certain assets to secure bank loans totaling HKD 1.55 billion as of June 30, 2023[23]. - The group maintains a prudent treasury policy to manage risks and reduce funding costs, with all treasury matters centralized at the head office[22]. - 9% of the loans are due in 2023, while 91% are due between 2024 and 2027[22]. - The group regularly reviews its cash flow and financing status to seek financing arrangements in response to new investment projects or loan repayment periods[22]. Operational Performance and Strategic Initiatives - The company continues to focus on enhancing operational performance across various business sectors and markets[12]. - The company is actively developing the Revolution Very Light Rail (RVLR) light rail train and is in the final planning stages for constructing a simulation train[14]. - The company expects stable performance in its UK Rails segment for the first half of 2023[14]. - The group is actively pursuing sustainable development initiatives, including hydrogen projects and carbon capture, with significant government funding for projects like Hydrogen Park Murray Valley and Gladstone[15][20]. - The group’s growth strategy is based on prudent financial management, balancing continuous development with maintaining an ideal debt level[21]. - The outlook remains cautious due to global uncertainties, but the group’s regulated business revenues are linked to inflation, providing resilience against current high inflationary pressures[21]. Governance and Leadership - The company has maintained a strong leadership team with extensive experience in finance and risk management, including executives with over 39 years of experience in accounting and financial management[30][32][33]. - The company continues to focus on sustainable development and risk management, leveraging the expertise of its board members in these areas[30][31]. - The board includes independent directors with significant experience in corporate governance and financial oversight, ensuring robust compliance and accountability[32][33]. - The company has a diverse board composition, with members holding advanced degrees and professional qualifications in finance, law, and management[30][31][32]. - The company has been involved in significant corporate governance practices, including audit and remuneration committees, to ensure transparency and ethical management[32][33]. - The company emphasizes the importance of sustainable practices in its operations, aligning with global trends towards environmental responsibility[30][31]. Risks and Challenges - The ongoing global economic challenges include high inflation, rising interest rates, and geopolitical tensions, which may impact the group's business and financial performance[93]. - The company is exposed to risks related to high transmissibility diseases, which could adversely affect its operations and financial results[94]. - Currency fluctuations pose a risk to the group's financial performance, as operations span multiple countries with different currencies[102]. - Cybersecurity risks are increasing, with potential threats to the group's operations and reputation, despite no significant damages reported to date[103][104]. - Labor market changes, including low unemployment and rising inflation, create uncertainty in labor supply and costs[105]. - Supply chain disruptions due to geopolitical tensions have led to increased costs and unpredictable delivery times, particularly affecting local operations[106]. - The potential risks associated with Brexit may impact trade intensity, labor supply, supply chains, and exchange rates, affecting profitability[107]. - The company operates through non-wholly owned subsidiaries, joint ventures, and strategic alliances, which may affect its business and financial performance due to potential inconsistencies in goals with partners[108]. - Economic sanctions imposed by governments and international organizations may impact the company's operations and relationships with partners, suppliers, and customers, potentially leading to significant financial losses[109]. - Local, national, and international regulatory changes may significantly impact the company's business operations and financial performance, leading to increased operational and capital expenditures[111]. - The company is subject to risks associated with compliance with data protection laws, which may result in regulatory actions or civil claims if not adhered to, potentially harming its financial status[112]. - Climate change poses medium to long-term risks to the company's assets and operations, potentially disrupting supply chains and causing financial damage due to extreme weather events[115]. - The company acknowledges significant advantages from its relationship with CK Hutchison Holdings, but this also involves related party transactions that require compliance with the Hong Kong Stock Exchange rules[114].