The recent energy crisis in the UK has led to a sharp increase in electricity and gas bills. Everyone knows.
The so-called crisis, naturally there is an organic crisis.
In this new situation, today we will focus on the winners and beneficiaries of this round of energy crisis.
In general, the holders of British energy companies represented by the Li Ka-shing family have seen a seven-fold increase in electricity prices in the UK in the past year, high gas bills, and fuel shortages. Undoubtedly a big winner.
Secondly, those large British energy companies can take this opportunity to acquire bankrupt small energy companies and grab more market share in one fell swoop.
Finally, British truck drivers and other blue-collar workers are also a big beneficiary group because of the sharp rise in wages due to this round of crisis.
Let’s take a look at them one by one below:
The rise in electricity and gas bills in the UK, the Hong Kong Li family makes a lot of money
As we all know, the Li Ka-shing family in Hong Kong has already mastered important infrastructure resources for the people’s livelihood in the United Kingdom through early large-scale acquisitions.
According to incomplete statistics, the Li Ka-shing family currently controls about a quarter of the electricity distribution market in the UK, nearly 30% of the natural gas supply market, nearly 7% of the water supply market, over 40% of the telecommunications market, and nearly one-third of the British docks, land resources of over 500,000 square meters.
Since 2010, Li Ka-shing has been gradually selling assets in Hong Kong and the Mainland.
Statistics show that Li Ka-shing has sold assets in the Mainland and Hong Kong at least more than 250 billion yuan. Subsequently, he invested the realised funds into overseas energy infrastructure markets, most of which went to the UK.
BBC reported that Li Ka-shing's Cheung Kong Holdings is the largest single overseas investor in British history, with a total investment of more than 255.5 billion yuan.
In short,Li's Cheung Kong Group currently controls nearly 30% of the UK natural gas market, a quarter of the electricity distribution market, and about 5% of the water supply market.
These industries, which are closely linked to the food, clothing, housing, and transportation of the British people, are undoubtedly very stable.
is a list of British companies under the Hong Kong Cheung Kong Group
When Li Ka-shing made the purchase before, the Cheung Kong Group stated:
"Its scarce energy infrastructure assets in the UK Not only the performance is stable, the return is guaranteed, but also the risk is extremely low. Some industries even have national endorsements, which can continuously generate safe and lasting stable income, which is in the interests of the Lee family.”
The British infrastructure of the Lee Empire Shareholding ratio
Under the current energy crisis, the electricity price in the UK has risen by 700% in the past year, and natural gas has also risen. This once again shows the success of the Li Ka-shing family's deployment ahead of schedule.
According to statistics, in the first half of this year, the Cheung Kong Group's revenue exceeded 210 billion yuan, and its net profit reached 32.7 billion yuan. Its performance in the European market accounted for more than 70%, and about a quarter of its performance came from the United Kingdom.
In 2010, the Yangtze River Infrastructure Group of the Li Ka-shing family spent 212 million pounds to acquire a 50% stake in the Seabank Power plant in Bristol.
In the same year, Yangtze River Infrastructure spent 5.8 billion pounds to acquire UK Power Networks. As a result, London, the southeast and east of England, about a quarter of the electricity distribution market in the UK are obtained.
As of September this year, the electricity price per MWh in the UK has risen to 285 pounds, breaking the historical record of 22 years from 1999 to the present, and this price has skyrocketed 700% over the same period in 2020.
September 14,The price of electricity in the UK has reached £424.61 per MWh, which is 10 times the average price in September 2020.
According to a recent study, energy prices and an expected 4% inflation rate will increase the daily electrical expenses of British households by at least 300 pounds next year.
Under such new circumstances, the British Power Company under the Cheung Kong Group is undoubtedly making a profit.
After talking about electricity, let’s look at natural gas again.
In 2005, Yangtze River Infrastructure spent £2.4 billion to acquire Northern Gas Company, an infrastructure company in northern England;
In 2012, Yangtze River Infrastructure spent £645 million to acquire the British gas company Wales and West Utilities. WWU's transmission and distribution network serves 7.4 million customers, covering nearly one-sixth of the United Kingdom.
With the soaring international energy prices, not only the cost of residential gas has risen, but the stocks of these companies that are mainly engaged in natural gas have also risen a lot. And ushered in a further rise.
In addition to Li Ka-shing, large British energy companies have also benefited from this wave of crisis
Since the energy crisis, soaring energy prices in the UK and the European continent are pushing small businesses to the brink of collapse and increasing ordinary British household bills.
But for large energy companies, this is an excellent opportunity to reshuffle the market and annex small companies, and they can even get government subsidies.
In early September of this year, several large power companies in the UK received high government subsidies of £4,000 per MWh due to factors such as restricted wind power generation, outages of nuclear power plants and high natural gas prices.
Phil Hewitt, director of market data specialist EnAppSys, said: “Generally speaking, the people who make money in the first two weeks of September are those who can sell energy at very high prices. As a result, large power plants make a lot of money. , Smaller peak power plants and battery suppliers have also made a lot of money.”
Fluctuations in electricity prices also benefit large companies with hydropower reserves, such as Drax and SSE.
For the same reason, the emerging energy storage industry will also benefit from this crisis.
British media also pointed out in multiple reports that in addition to direct profits from soaring energy prices, as small companies close down one after another, larger companies in the energy industry will take the opportunity to consolidate their positions. .
For example, British Gas, a British gas company under Centrica, has been losing customers in recent years due to competition from small companies. However, in September, British Gas directly gained 350,000 new customers from the bankrupt People’s Energy. Centrica's stock price has also risen by 20% since the beginning of August.
Analysts at consulting firm Baringa estimate that by the end of the crisis, the number of retail energy suppliers in the UK may drop to only 10.
More powerful energy companies such as Octopus, British Gas, Scottish Power and Ovo will dominate.
It is also worth mentioning that as the energy crisis intensifies, the British government also announced an emergency suspension of the competition law this Monday (September 27), allowing gasoline suppliers to increase prices for retail customers. This move gives the energy companies that have survived greater pricing power.
The annual salary of truck drivers has risen sharply, and British blue-collar workers have also benefited
As I wrote in a previous article, an important reason for this UK energy crisis (especially the gasoline crisis) is because of the UK Lack of drivers,To put it simply, the UK lacks drivers to send oil from refineries and ports to gas stations.
As a result, the salaries of British truck drivers have skyrocketed. Some British bosses even offered truck drivers an annual salary of up to 78,000 pounds (about 700,000 yuan), which is higher than the salary of lawyers and white-collar workers.
In addition, the wages of other blue-collar workers in the UK have also risen a lot, including fruit and vegetable pickers (£62,000), milkmen (£45,000), couriers (£52,000) and so on.
British investors write at the end
Throughout this round of energy crisis, even if it is resolved in the future, such a crisis is likely to happen again during the global transition to green energy.
However, crises have always coexisted with dangers and opportunities, and those who are prepared and with a vision for investment will still benefit from it. As an ordinary person, possessing multiple skills and developing the habit of saving will also help you overcome difficulties.
-End-
l Source: British investor
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