Acquisition of aircraft leasing business from CK HutchisonIn our view, the acquisition of the aircraft leasing business is in-line with the company'sstrategy to look for yield-generating investments with good liquidity while they arewaiting for a better entry point to replenish landbank in Hong Kong in a more sizeablecontext. On 2 December, CKP announced it would acquire the aircraft leasing businessfor US$978mn （HK$7.589bn）。 The deal is conditional on several conditions that need tobe fulfilled and is expected to be completed within the next two months.
　　Reasons for the deal: Realigning businesses, reducing net cashEven before Cheung Kong Property was spun-off from CK Hutchison in thereorganization last year, the aircraft leasing business was taken care of by Cheung KongHoldings, which now post this deal will be managed by Cheung Kong Holdings. Thepotential deal is a follow-up act to realign businesses in our view. Second, CKP says thatit is now in a net cash position and it expects net cash to grow bigger with morereceivables being due. However, the land market has not yet corrected and they find itchallenging to invest. CKP also said that it has bought （or committed to） 36 aircraft in2H16 already and this purchase will grow the business into a meaningful size