Q&ACategory: Dividend Stocks2014 CKI Annual report
zunyang asked 4 weeks ago
The Profit attribute to the Shareholders (31782) are much higher than the Total Turnover (28326). This does not seem normal. I could not find any exceptional profits compared to other years. Could you show me what did I miss in the report?  
4 Answers
Victor Chng Staff answered 4 weeks ago

Hi Zunyang,

 

 

CKI's financials are complex due to its ownership of some companies with less than 50% interest. When a holding company owns less than a 50% stake in a subsidiary, it records only its share of the profits rather than the full financials. This explains why you might observe that the net profit appears higher than the revenue.

 

 

Nevertheless, there are also exceptional items in the profit that you need to adjust. See below:

 

 

 

1. Go to page 9 of AR2014. There is an * in 2014 showing that they spun off the Hong Kong electricity business of Power Assets Holdings Limited. There is an exceptional gain of about $19 billion, which you need to deduct.

 

 

 

2. In the P&L, page 80, the exceptional items are other income, exchange gain and gain on disposal of a subsidiary.

zunyang replied 4 weeks ago

Thank you, Victor.
Is the spun off business of the HK electricity the same as “disposal of a subsidiary”? The amount does not match.

Victor Chng Staff answered 3 weeks ago
Hi Zunyang,


 This part is slightly tricky. Technically, it is a disposal, but CKI also owned 36.01% of Power Assets.


zunyang answered 3 weeks ago

To analyze its net profit for the past ten years, does it mean I have calculate the net profit by ( 31,782 (Profit attributable to shareholders) - 19,000 (Power Assets) - 318 (Other income) - 207 (Exchange gain) - 2236 (Gain of disposal of a subsidiary) ) ?

Victor Chng Staff answered 3 weeks ago
Hi Zunyang,


Your collection is correct for FY2014.
Victor Chng Staff replied 3 weeks ago

Do note that HKD19B only happened in 2014. For the rest of the year, there will not be recurring.

zunyang replied 3 weeks ago

Understood, the sale of Power Assets is a one-off event. Thanks for the guidance!