CKH hiding $57b debt, says short seller
by Stella Zhai
Short seller GMT research said CK Hutchison Holdings (0001) may be concealing HK$57.7 billion of debt associated with assets held-for-sale.
The Hong Kong-based short seller also pointed out in the report that CKH's profit in 2018 surged 38 percent to HK$13.2 billion due to accounting adjustments from the acquisition of Italian telecom operator Wind Tre, plus the residual impact of its reorganization in 2015.
These non-cash adjustments explained why CKH's operating cash flows lagged cash profit, and why the company's capital expenditure consistently exceeded its depreciation and amortization, said GMT.
The short seller criticized that this aggressive accounting was being used to give CKH a higher market rating and access to cheaper credit.
CKH has recognized a nominal net gain of around HK$193 million from non-cash accounting movements in its 2018 annual report.
S&P Global Ratings has also raised CKH's rating by one notch to single-A during last year. The company has not yet responded to the short sell report.
Meanwhile, CK Asset (1113) is considering selling its Shanghai project - Upper West Shanghai - and may cash in almost 12 billion yuan (HK$13.7 billion), said Bloomberg. The sale of the entire project could be valued at about 20 billion yuan. CK Asset has a 60 percent interest.
Source: The Standard
http://www.thestandard.com.hk/section-n ... 0515&sid=2