If global trade lost momentum in 2025, it could run out of even more steam in 2026.

The global supply chain landscape is entering a period of modest, highly fragmented expansion in 2026. According to the UNCTAD April 2026 Global Trade Update, drama around the Strait of Hormuz has sent shipping costs, fuel prices, and war-risk insurance premiums through the roof.

The Middle East conflict didn’t ruin FY 25, but it is a major drag for FY 26, adding friction to already slowing trade flows and making growth even harder to come by. That is a headache if your business relies on shipping boxes, selling bandwidth, or getting people to spend cash.

On the bright side of things, the global retail market is still going strong and is expected to hit a whopping $29.8 trillion, as per a Mordor Intelligence Global Retail Industry Report. This is where a massive company like CK Hutchison Holdings Limited wins.

As it owns a mix of ports, retail, tech, and infrastructure, the company can protect itself from these global jolts. Thanks to booming health and beauty stores across Europe and Asia, their retail division brought in HKD 209.3bn in total revenue - a solid 10% jump in reported currency.

A fading glow

CK Hutchison’s FY 25 numbers are a classic “good business, messy earnings” story. Revenue moved from HKD 476.7bn to HKD 507.3bn (6% y/y) mostly on incremental gains across diversified businesses such as ports, telecom and retail.

The company’s reported profit dropped from HKD 17.1bn to HKD 11.8bn in FY 25 (-31% y/y), a loss from reshuffling the business, not because the core operations suddenly fell apart. This drop was entirely caused by absorbing the one-off HKD 10.47bn non-cash accounting loss, triggered by diluting Three UK from a 100%-subsidiary to a 49%-stake in the VodafoneThree joint venture.

The Retail Division (AS Watson) acted as the group's growth engine. Total retail revenue surged 10% y/y to HKD 209.3bn from HKD 190.2bn, powered by explosive momentum across health and beauty markets in Europe and Asia. The domestic China retail segment dragged on overall margins due to highly challenging local consumer spending environments.

Cash flow is where the picture genuinely improves. Free cash flow surged 102% to HKD 41.2bn in FY 25, up from HKD 20.4bn in FY 24. This spike was predominantly driven by HKD 13.1bn in net cash proceeds received directly from the finalisation of the UK telecom merger between Three UK and Vodafone.

High hopes, low multiples

The stock has clearly had a strong run. It rose by 56.4% over the past year to HKD 71.2, and isn’t far off its 52-week high of HKD 74.4. At a HKD 273bn market cap ($34.9bn) market cap, the stock's FY 26e P/E is 9x, well below its 3-year average of 11.1x, which tells you that the market isn’t fully buying into the story yet.

The sentiment is clearly bullish with seven buys and just one hold - although that’s also where you start to get cautious. That's not exactly screaming conviction, especially after a +56.4% run.

CK Hutchison is priced for modest execution, not perfection. The valuation gap looks tempting, although it’s there for a reason.

Static signal

CK Hutchison's safety net is being tested by severe structural strains. The massive elephant in the room is the escalating Middle East conflict, which is hitting their port network hard. Rerouted shipping lanes, bottlenecked terminals, and skyrocketing insurance premiums mean global cargo throughput is taking a beating.

That creates a nasty domino effect for their massive European retail footprint, where regional stagflation and high energy costs are already pinching consumer wallets. Diversification looks great on paper, but a synchronized macro shock across shipping, retail, and credit means they are burning serious operational fuel just to stand still.