HONG KONG: Cheung Kong Infrastructure Holdings Ltd, the roads and utility company controlled by billionaire Li Ka-Shing, said the sale of power plants that helped boost first-half profit will go toward funding overseas expansion.

Net income rose 67 percent to HK$3.9 billion ($503 million), or HK$1.72 a share, from HK$2.3 billion, or HK$1.03 a share, a year earlier, the company said in a statement to the Hong Kong stock exchange yesterday. That's better than a median estimate of HK$3.13 billion in a Bloomberg survey of six analysts.

Cheung Kong Infrastructure, which has assets in Australia, Canada and the UK, will sell three power generators on the mainland to Hongkong Electric Holdings Ltd for HK$5.68 billion, according to a joint statement in February. The sale helped boost Cheung Kong Infrastructure's "war chest" for acquisitions to HK$10 billion, the company said yesterday.

"The divestment of the three power plants enabled CKI to realize the value of some of the mature projects in the portfolio and further enhanced its financial capacity for future expansion," said Chairman Victor Li in the statement.

Cheung Kong Infrastructure rose 1 percent to HK$29.10 in Hong Kong trading. The Hang Seng index gained 2 percent.

Seven out of 10 analysts have a "buy" rating for Cheung Kong Infrastructure, according to data compiled by Bloomberg. The company is the most attractive investment among Hong Kong's utilities as it has the ready money to acquire more assets overseas, according to a report by Citigroup on July 29.

Victor Li, the elder son of Li Ka-shing, said on May 14 the company is particularly looking at taking new stakes in countries where it already operates businesses.

The utility has invested in gas, water and road assets overseas to counter slowing growth in the domestic power distribution market in Hong Kong.

Cheung Kong Infrastructure has a 39 percent stake in Hongkong Electric, the territory's second-biggest power supplier.

Bloomberg News

(HK Edition 08/07/2009 page3)