Li Ka-shing has appeared quite frequently in the articles these past few days, and I've seen many people discussing his past in the comments. Some readers have provided inaccurate information, so since we're just chatting tonight, I'll take this opportunity to supplement that information for everyone.
1. The story of how the port was to be sold to a Chinese state-owned enterprise.
In 2015, Mr. Li wanted to sell a 40% stake in a port company, targeting a consortium of Chinese state-owned enterprises, primarily China Merchants Group and COSCO Group. At the time, the shipping industry was experiencing a golden age of rapid growth, and there were no other unforeseen factors interfering, so Mr. Li was very ambitious and offered a high price of HK$150-160 billion.
Selling a 40 % stake for 160 billion yuan puts the overall valuation at 400 billion yuan. That's quite expensive, roughly 25-27 times the port company's EBITDA at the time. Moreover, because only a 40% stake was sold, the state-owned enterprise was essentially just a financial investor and didn't gain control of the company.
After comprehensive evaluation, the state-owned enterprise abandoned the acquisition. Then, in September of that year, the famous article "Don't Let xxxxxx" was published, which caused a public outcry. After that, the deal was even less likely to happen.
Some people on the internet are saying that the state-owned enterprise's offer was too low, which led to the failure of the transaction. This is not true. It is true that Old Li's offer was a bit too high, but commercial transactions are based on the willingness of the buyer and seller, so there is nothing to say about the failure of the transaction.
In comparison, when Li sold 80% of his stake to BlackRock in 2025, it was valued at HK$177 billion, with an overall valuation of around HK$220 billion. Based on EBITDA, this was about 12 times, half the price of the deal in 2015.
However, times have changed. The port industry is no longer as profitable as it was ten years ago, and there are also huge geopolitical risks. So it's not surprising that Old Li is selling off his assets at a low price to avoid risks.
2. The past of the Sanfang Qixiang renovation project.
In 1993, a company under Cheung Kong Holdings signed a contract for the renovation project of Sanfang Qixiang in Fuzhou. The area was the birthplace of many famous figures such as Lin Zexu and Yan Fu. At the time, the government hoped to develop it into a comprehensive district combining cultural relics, commerce, and tourism.
Old Li's company had promised to restore the ancient buildings within 5-7 years, but in reality, the buildings remained idle for 10 years, with construction not starting until 2003. During the actual development, some of the ancient buildings were demolished, and the northwest corner of Sanfang Qixiang was cut off to build a residential complex.
In addition, Guanglu Lane and Jibi Lane were transformed into roads, and the "Three Lanes and Seven Alleys" became "Two Lanes and Five Alleys" , destroying the street layout.
This incident caused a public backlash in Fuzhou at the time, and the government eventually terminated the contract in 2004, reclaimed the land in 2005, and subsequently invested 3-4 billion yuan to restore Sanfang Qixiang, which is now a national 5A-level scenic spot.
This incident is also a microcosm of the real estate development practices of Lao Li's company in mainland China over the years. Their penchant for delaying development and hoarding land in anticipation of price increases has been criticized by many as a lack of social responsibility. Regarding this, I suspect it might be a result of Hong Kong's unique business environment.
I've been to Hong Kong several times, and what impressed me most was the extreme pursuit of efficiency in building construction. You often see buildings so close together, like toothpicks, with only two or three meters between them. This kind of construction wouldn't be allowed on the mainland, but in Hong Kong, as long as it's not illegal, they won't interfere. Developers will design plans with the goal of maximizing profits.
Therefore, Hong Kong businessmen are generally very law-abiding, but outside the law, they look to the future. This business logic has encountered conflicts and contradictions when applied to the mainland. However, to be fair, Mr. Li's business model is very stable and conservative. Even if he has harmed some public interests, he has not left any projects unfinished or indebted. In terms of wrongdoing, he is far less serious than Evergrande.
Since I still have some space, I'll also explain a recently popular new term: HALO trading . HALO is an abbreviation for Heavy Assets, Low Obsolescence.
The core idea is that AI will disrupt software, services, and asset-light industries in the future, but it cannot replace physical infrastructure, energy, materials, and industrial capacity . Amidst the high level of AI interest and extremely crowded trading, a group of funds in Europe and the United States are seeking "physical assets that are difficult to replicate and will not be eliminated."
Morgan Stanley released a HALO basket; I've copied and pasted it here for your reference:
- Materials: Copper, aluminum, rare earth elements, steel, and chemical raw materials (AI computing power/infrastructure necessities)
- Utilities: Power grid, hydropower, thermal power, and new energy power plants (AI power consumption core)
- Railways/Pipelines: Logistics and oil and gas transportation networks (the arteries of the physical world)
- Waste management: solid waste, hazardous waste, water treatment (essential needs, low-tech iteration).
- Defense and military industry: Equipment and military production capacity (high barriers to entry, long cycle ).
- Signal towers/communication infrastructure: 5G/fiber optics, data center physical layer (computing power base)
- Traditional energy sources: oil, natural gas, coal (AI computing power and the foundation of industrial operation)
Morgan Stanley's portfolio has performed well over the past year, while the tech sector, heavily impacted by AI, has significantly underperformed the broader market. One explanation for the recent continuous decline in the Hang Seng Internet Index is that its constituent companies will be severely impacted by AI in the future, leading to capital flight and a shift towards utilities, energy, and infrastructure.
If that's the logic, then we need to reassess this round of Hang Seng Internet's decline. To be honest, I also think that relying solely on ByteDance's pressure and the 150 billion yuan food delivery spending shouldn't make it that weak.
That's all for tonight. For some reason, today's article can't have automatic highlighting of comments, so I'll have to manually scroll through them one by one.
Original Article: View Chinese Version
