CK HUTCHISON HLDGS (OTCMKTS:CKHUY) opened with a sharp gap down yesterday but managed to recover a bit to close at the end of the day with a loss of 3.19%. The correction has taken the stock to the last swing low around $13.50 levels and the price action now can well determine the short term trend. The volume of the day at 935,000 was much higher than the daily average of 231,000, not a very comfortable fact for the bulls. The bears will take their chances as long as the stock remains below the major resistance around $15 levels.


CK HUTCHISON HLDGS (OTCMKTS:CKHUY) management has not released any PR since last few months. In June, Moody’s Investors Service assigned “A3” issuer rating to CK Hutchison and affirmed the “A3” grade on the senior unsecured bonds and “Baa2” rating on company’s subordinated perpetual capital securities initially guaranteed by HWL and later guaranteed by both CKHH and HWL. The ratings outlook remains stable.

The highlights

Moody’s has also withdrawn HWL’s A3 issuer rating. These measures follow the completion of the restructuring of HWL and Cheung Kong Limited originally reported on January 9, 2015. Under the restructuring, the two firms separated their operations into a property entity known as Cheung Kong Property Holdings Ltd and non-property company, CKHH.

CK Hutchison “A3” ratings reflect Moody’s assessment that company’s credit profile is not substantially different from HWL. Though pro-forma credit metrics of CK Hutchison are a bit weaker, the advantages to the operations profile from the improved interests in infrastructure properties and cash infusion of HKD55 billion offset the divestiture of the stakes in the property development operations in China.

The details

CK Hutchison has increased its stake in Wales & West Utilities Limited to nearly 62%, whose credit strength supports Moody’s “Baa1” rating on the bonds released by Wales & West Utilities. Additionally, the company now owns nearly 70% stake in Australian Gas Networks Ltd (Baa1 stable).

Over the next two years, Moody’s projects these ratios to remain at similar level or record slight improvement, as three Group Europe performs; CKI continues with cash accretive investments and increases or maintains dividend payments; retail operations remains robust; and Husky’s large projects move forward as planned and enhanced volumes offsets the weak price environment. Also, Moody’s expects company’s operations to maintain their robust cash positions and improved liquidity. The company’s rating highlights its geographic diversification and broad business portfolio.