Hutchison Port Holdings Trust - Smoother sailing expected (DBSV)

Hutchison Port Holdings Trust
BUY US$0.675
STI : 3,167.43
Price Target : 12-Month US$ 0.80 (Prev US$ 0.82)
Smoother sailing expected

•Should see better organic throughput growth in 2014 as Europe and US recover
• Lack of one-off events such as industrial action and acquisition costs to boost FY14 numbers
• Attractive prospective yield of 8.1% for FY14 with FY13 final dividend of HK21cts coming up
• BUY with DCF based target price of US$0.80


Proxy for US and Europe recovery.
With the US and Europe trade accounting for over half of the volumes that HPHT handles (70% for Yantian port), the Group should benefit from a recovery in these 2 regions in 2014, especially in terms of exports from the Pearl River Delta region to Europe.

Earnings to rebound in FY14 from absence of oneoffs.
 HPHT had a year to forget in 2013, with the industrial action in the first half of the year, acquisition costs and lower than expected organic growth affecting its profitability and thus DPU for the year. With these behind them, and with a US and Europe recovery in sight, we expect HPHT to improve EPS and DPU in 2014, factoring in 2% and 3% throughput growth for its HK port and Yantian port respectively.

Attractive yields on offer, along with earnings recovery.
The stock offers a prospective FY14 dividend yield of 8.1%, as its earnings rebound from FY13’s oneoff events and with the Group due to report its full year results in February, we also expect a final dividend of c. HK20cts to be declared

Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 03/01/13