CKH's 2021 Telco Ops Dented by Lower Gross Margin, Some Near-Term Challenges

Conglomerate CK Hutchison Holdings, or CKH, is expected to continue to focus on acquisitions, spin-offs and cost containment in order to raise its profit. We think efforts to improve customer retention at its drugstore chain Watsons, and the tweaks to its portfolio of telecom activities will help drive profit on our view that activities are gradually normalizing post pandemic. The next six months, however, could still present some challenges in China and Hong Kong, given the omicron variant spread.