For Li Ka-shing Investors, Special Dividends Are Really Special

(Bloomberg) -- Billionaire Li Ka-shing’s reluctance to pay extra dividends is disappointing investors again.

Shares of Hutchison Telecommunications Hong Kong Holdings Ltd. plunged as much as a record 16 percent to HK$2.81 on Tuesday, a day after the company said that proceeds from its HK$14.5 billion ($1.9 billion) sale of fixed-line assets last year wouldn’t be used to pay out a special dividend for now. Hutchison plans to assess better uses of its cash and the company will consider making a special payout to investors a year later if no opportunity is identified, it said.

In response, Morgan Stanley wrote in a report that the added wait for a payout turned Hutchison’s risk-reward unattractive. The brokerage also downgraded the stock to equal-weight from overweight, and lowered its share-price target to HK$3.40 from HK$3.60.

This isn’t the first time that Hong Kong’s richest man disappointed investors over dividends. For years, his Power Assets Holdings Ltd. unit resisted calls to bolster shareholder returns through dividends after collecting a HK$53 billion bounty from a share sale. Last year, the company eventually paid shareholders with its first special dividend in more than a decade.

To contact the reporter on this story: Prudence Ho in Hong Kong at pho83@bloomberg.net.

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Dave McCombs

©2018 Bloomberg L.P.