Although Cheung Kong (HKSE:00001) declined 7% in the third quarter, its 13% YTD return made this Hong Kong based conglomerate a large contributor for the year. In the first half, Hong Kong property sales were strong, and management made several value - enhancing asset sales across multiple business lines as well as returned capital to shareholders. More recently, Cheung Kong’s price was penalized amid protests and labor strikes in Hong Kong. Our appraisal remained intact. We are partnered with strong capital allocators who have not bought overpriced assets in China or Hong Kong. Cheung Kong’s strong balance sheet positions management to buy discounted land in the event of a real estate correction.
From Mason Hawkins (Trades, Portfolio)’ Longleaf Partners Q3 2014 Management Discussion.
