Wednesday 31 July 2013

Hutchison Port Holdings Trust

UOBKayhian on 31 Jul 2013

Revenue slid 2.6% yoy in 2Q13 and 1% yoy in 1H13. Revenue was HK$3,032m in 2Q13 (-2.6% yoy) and HK$5.9b in 1H13 (-1% yoy). Throughput in 2Q13 in HIT and Yantian fell 20.1% and 1.3% yoy respectively. The lower-than-expected throughput numbers were mainly due to the contractors’ strike in HIT, and lower transshipment and US/EU cargoes in Yantian. The favourable throughput mix of containers from liners caused the average revenue per TEU for Hong Kong to rise yoy in 2Q13. ASP was flattish yoy at Yantian due to less concessions granted to some liners but offset by output value.

Maintain BUY and target price of US$0.88, based on 3-stage DCF model. Despite the limited DPU growth going forward, our 2013F dividend yield of 7.0% looks attractive among Singapore-listed large-cap trusts/REITs. In addition, there is no asset devaluation risk for HPHT as deep-water coastline is a scarce resource.

(HPHT SP/BUY/US$0.735/Target: US$0.88)
FY13F PE (x): 23.1
FY14F PE (x): 22.4

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