Cheung Kong (Holdings) Ltd Chairman Li Ka-shing, Hong Kong's richest man, is buying more shares in the property developer, the worst-performing stock this year among the city's five biggest real-estate companies.
Li paid HK$424 million for 4.39 million shares, about HK$96.50 each, on Nov 24, the biggest of eight purchases this month, according to the Hong Kong stock exchange data. He now owns a 40.9 percent stake, the data showed. Cheung Kong fell 0.7 percent to HK$97.8 at noon in Hong Kong yesterday.
The benchmark Hang Seng Property Index has surged 64 percent this year, compared with a 35 percent gain in Cheung Kong, as record low interest rates and the rebounding local economy lifted housing prices.
The stock's underperformance is "a good buying opportunity" for Li, according to Raymond Ngai, an analyst at JPMorgan Chase & Co.
"Cheung Kong's property business is doing fine," said Ngai, who rates the company's shares "neutral". Cheung Kong has failed to match gains in other local developers because of concerns about unit Hutchison Whampoa Ltd, Ngai said.
Sun Hung Kai Properties Ltd, the city's biggest developer by market value, has gained 80 percent this year, Henderson Land Development Co has almost doubled, Sino Land Co has gained 85 percent, Hang Lung Properties Ltd has risen 74 percent and China Overseas Land & Investment Ltd has increased 55 percent.
Hutchison, 49.9 percent-owned by Cheung Kong, will post a 63 percent drop in 2009 full-year profit, according to the average of six analysts' estimates compiled by Bloomberg.
The company, with operations in industries spanning ports, energy, telecommunications and retailing in more than 50 countries, was challenged by the slowing global economy, Li said in August.
Li, 81, is dubbed "Superman" by Hong Kong's media because of his track record for investing. He correctly predicted in 2007 that China's stock market was in a "bubble", and his fortune was estimated at $16.2 billion by a Forbes magazine survey in March, making him Asia's second-richest individual.
Cheung Kong is rated the equivalent of "buy" by 13 of 22 analysts tracked by Bloomberg, and nine analysts have "hold" or similar recommendations.