Li Ka-Shing is Asia?s richest man and is often dubbed as ?Superman? in Hong Kong, his homeland. The tycoon, who is well-known for making savvy investments, has recently been keen to splash the cash in Europe.
According to a recent Bloomberg article, Li?s been in talks to buy Britain?s second largest mobile provider O2 for up to US$15 billion. Interestingly, this is hardly Li?s first serious excursion into Europe.
The same Bloomberg article also mentioned some of Li?s other business deals in Europe over the past two years:
? Hutchison bought Telefonica?s Irish unit for $1.1 billion, purchased more mobile…
Li Ka-Shing is Asia’s richest man and is often dubbed as “Superman” in Hong Kong, his homeland. The tycoon, who is well-known for making savvy investments, has recently been keen to splash the cash in Europe.
According to a recent Bloomberg article, Li’s been in talks to buy Britain’s second largest mobile provider O2 for up to US$15 billion. Interestingly, this is hardly Li’s first serious excursion into Europe.
The same Bloomberg article also mentioned some of Li’s other business deals in Europe over the past two years:
“[Li’s company] Hutchison bought Telefonica’s Irish unit for $1.1 billion, purchased more mobile spectrum in Austria and held talks to acquire wireless assets in Italy. One of Li’s companies is also among bidders for Swedish electricity grid Fortum.”
Looking at all this, I can’t help but shake the feeling that Asia’s richest tycoon seems to be telling us that he sees Europe as the next big thing and he wants to get his foot in the door first.
If Li’s right, then companies in Singapore with large exposure to the European economy may get to enjoy some strong tailwinds. Let’s take a look at two such companies in particular.
Welcome to Ascott
In Europe, the trust has properties in Belgium, United Kingdom, France, Spain, and Germany. According to its latest annual report for 2013, gross profit from its European operations made up 46.9% of total gross profit. The REIT’s assets in Europe also accounted for 36.8% of overall reportable assets.
Currently, Ascott REIT offers a 6.5% yield for unitholders and has turned in a decent total return of 113% over the past 10 years (that’s an annualised return of 7.85%) with distributions reinvested.
“To be the world’s land transport operator of choice”
The quote above is actually the vision of ComfortDelGro Corporation Limited (SGX: C52). Given the company’s world-wide ambitions, it might not be a complete surprise to learn that it has a significant foothold in Europe.
Within Europe, ComfortDelGro currently has businesses in the United Kingdom and Ireland. In 2013, the company’s European operations made up roughly a fifth of total revenue and 15% of operating profit.
In the United Kingdom, ComfortDelGro operates bus, coach, taxi radio circuit, and private car hire businesses. In all, that group of businesses in the United Kingdom recorded revenue of S$788.1 million in 2013 and have a total fleet size of more than 8,100 vehicles.
Currently, ComfortDelGro has a P/E (price to earnings) ratio of 21.4 and a dividend yield of 2.54%. The transport outfit has also been a strong performer over the past decade; shareholders would have earned a total return of 184% with dividends reinvested in that period. That is an annualised return of 11%.
Although Singapore is thousands of miles away from Europe, there are still some strong companies here that have exposure to that continent.
If you believe in the wisdom of “Superman” Li Ka-Shing, these two companies might be worth your time to look a little deeper even if for nothing else other than their European operations.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn't own shares in companies mentioned.