CK Hutchison Holdings Ltd.’s stock slumped after the Hong Kong conglomerate reported weaker-than-expected profit while a ports sale plan faces uncertainty after infuriating Beijing.

Shares plunged as much as 3.3% on the morning of March 21 in Hong Kong. The company has warned of a deteriorating global business environment due to geopolitical and trade tensions in an earnings statement released after the market close on March 20. 

Billionaire Li Ka-shing’s flagship firm reported a 27% decline in net income to HK$17.1 billion ($2.2 billion) for 2024, missing analyst expectations for HK$22.5 billion, according to a statement on March 20. Revenue came in at HK$476.7 billion, compared with HK$462 billion a year earlier. It announced a full-year dividend of HK$2.2 per share, compared with HK$2.53 per share a year before.

CK Hutchison, now led by Li’s son Victor Li, has been caught in the crosshairs of increasing tensions between the U.S. and China since it announced an agreement to sell 43 ports — including two in Panama — to a consortium led by BlackRock Inc. While the conglomerate is set to make $19 billion in cash proceeds from the deal, the agreement has enraged Beijing after President Donald Trump touted it as a reclamation of the Panama Canal.

“The operating environment for the group’s businesses is expected to be both volatile and unpredictable,” Chairman Victor Li said in the statement. He cautioned about headwinds from geopolitical developments, which could in turn spawn supply chain disruptions in the early part of 2025.

The group will rein in capital spending and new investment, while tasking its businesses to increase productivity and reduce operating spending, Li said.

Several Chinese state agencies are studying CK Hutchison’s ports deal for any potential security breaches or antitrust violations, Bloomberg previously reported. It’s unclear what levers China can pull to block the deal, given that it involves the company’s overseas assets only. The group has kept all of its ports in Hong Kong and mainland China. 

CK Hutchison’s statement didn’t mention the sale of its ports portfolio, including the two terminals it operates in the Panama Canal. While the group typically holds press and analyst briefings following the announcement of its annual results, they were skipped this year, highlighting the sensitivity of the deal.

The company reported an 11% increase in revenue at its ports and related services business, with earnings before interest, taxes, depreciation and amortization rising 19%, helped by more export activities in a port in southern China, as well as supply chain relocations benefiting ports in Asia and Latin America.

But the ports sector remains CK Hutchison’s smallest revenue contributor with an input of 9%, falling behind other businesses including retail, infrastructure and telecommunications.  

The group has reported progress in a planned merger of its £15 billion ($19.4 billion) U.K. telecoms business with Vodafone Group Plc, which secured approval from the country’s antitrust authorities. The group is working with the authorities to put in place the final undertakings in order to close the transaction within the first half of this year, it said in the statement. 

Meanwhile, investors have boosted options bets to an eight-year high, as they await more clues on the ports deal, a definitive agreement for which is expected to be signed by April 2. 

The group’s operations in Hong Kong and mainland China mainly include ports in places like Shenzhen and Shanghai, supermarkets, health and beauty retail, telecommunications and biotech development. These businesses could become targets if Chinese authorities decide to penalize the company for selling to the U.S. what they view as strategic assets to China’s interest.

But the group’s diversified global portfolio could help ease the impact of a potential political fallout. Hong Kong and China accounted for 12% of revenue in 2024, while Europe, Canada and Australia made up the bulk of the rest.

The Li family’s real estate arm CK Asset Holdings Ltd. reported net income of HK$13.7 billion, compared to HK$17.3 billion in the previous year. Hong Kong, the company’s main property market, has been experiencing a prolonged downturn due to expensive interest rates and an oversupply of homes. CK, along with other developers in the city, will have to offer apartments on the cheap to lure buyers.