HPHT reported 1Q15 PATMI of HK$285.8m, which decreased 48.9% YoY mostly due to the absence of a one-time HK$243.8m gain recognized in the same period last year. Adjusting for this one-time item, management indicated that 1Q15 PATMI would have dipped 9% YoY. In terms of the topline, 1Q15 revenues were mostly flat at HK$2948.5m, up 0.1% versus HK$2944.5m in 1Q14. We judge this set of results to be broadly in line with expectations. With regards to tariff increases, management also updates that it expects to achieve a 4% to 6% increase – in line with our expectations and what had been previously guided – and these will be retroactively applied from 1 Jan 2015 when negotiations are completed. We note, however, that only half of the trust’s customers will be subjected to the tariff increase this year. Maintain HOLD with an unchanged fair value estimate of US$0.68.
1Q15 PATMI decreased YoY due to absence of one-time gain
HPHT reported 1Q15 PATMI of HK$285.8m, which decreased 48.9% YoY mostly due to the absence of a one-time HK$243.8m gain recognized in the same period last year. Adjusting for this one-time item, management indicated that 1Q15 PATMI would have dipped 9% YoY. In terms of the topline, 1Q15 revenues were flat at HK$2948.5m, up 0.1% versus HK$2944.5m in 1Q14. Over the quarter, the container throughput of HIT was mostly unchanged YOY while throughput at YICT increased 10.0% primarily due to the growth in US, transshipment and empty cargoes. The average revenue per TEU in HK was also higher than last year due to tariff increases but partially offset by unfavorable throughput mix from liners. In China, the average revenue per TEU decreased YoY due to a higher empty/laden container mix. We judge this set of results to be broadly in line with expectations; 1Q15 revenues and PATMI constitute 21.3% and 11.1% of our full year forecasts, respectively, but we expect the trust’s numbers to improve over the remainder of the year with tariff increases and continued strength in US cargo trends.
US outbound cargoes continue to grow
In 1Q15, outbound cargoes to the US continued to grow in 1Q15 but outbound volumes to the EU remain muted. Management expects these trends to persist in 2Q15 as the fundamentals of the US economy are likely to stay firm while a high unemployment rate and fragile consumer sentiments continue to weigh on the EU’s recovery. With regards to tariff increases, management also updates that it expects to achieve a 4% to 6% increase – in line with our expectations and what had been previously guided – and these will be retroactively applied from 1 Jan 2015 when negotiations are completed. We note, however, that only half of the trust’s customers will be subjected to the tariff increase this year. Maintain HOLD with an unchanged fair value estimate of US$0.68.
HPHT reported 1Q15 PATMI of HK$285.8m, which decreased 48.9% YoY mostly due to the absence of a one-time HK$243.8m gain recognized in the same period last year. Adjusting for this one-time item, management indicated that 1Q15 PATMI would have dipped 9% YoY. In terms of the topline, 1Q15 revenues were flat at HK$2948.5m, up 0.1% versus HK$2944.5m in 1Q14. Over the quarter, the container throughput of HIT was mostly unchanged YOY while throughput at YICT increased 10.0% primarily due to the growth in US, transshipment and empty cargoes. The average revenue per TEU in HK was also higher than last year due to tariff increases but partially offset by unfavorable throughput mix from liners. In China, the average revenue per TEU decreased YoY due to a higher empty/laden container mix. We judge this set of results to be broadly in line with expectations; 1Q15 revenues and PATMI constitute 21.3% and 11.1% of our full year forecasts, respectively, but we expect the trust’s numbers to improve over the remainder of the year with tariff increases and continued strength in US cargo trends.
US outbound cargoes continue to grow
In 1Q15, outbound cargoes to the US continued to grow in 1Q15 but outbound volumes to the EU remain muted. Management expects these trends to persist in 2Q15 as the fundamentals of the US economy are likely to stay firm while a high unemployment rate and fragile consumer sentiments continue to weigh on the EU’s recovery. With regards to tariff increases, management also updates that it expects to achieve a 4% to 6% increase – in line with our expectations and what had been previously guided – and these will be retroactively applied from 1 Jan 2015 when negotiations are completed. We note, however, that only half of the trust’s customers will be subjected to the tariff increase this year. Maintain HOLD with an unchanged fair value estimate of US$0.68.
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