Monday, February 4, 2013

HPH Trust

HPH Trust: 4Q results in-line although at the higher end of estimates. 2H12 DPU as promised in grp’s prospectus. As expected, 2H12 DPU of HK27.19c /share was declared, bringing FY12 DPU to HK51.24c. Better then expected cost controls was the main factor to the strong then expected results. On a Full year basis, HPH Trust fared better. Throughput at its ports grew 5% yoy from 21.9m TEUs in 2011. CEO said that in light of lower throughput in Hong Kong and slower exports from South China, HPH Trust will supplement operations by going after more transhipment of cargo. Grp expects 2013 throughput to grow 5-7% (vs. +5% in 2012). The growth will be mainly driven by stronger growth of US (+3-5% in 2013 vs. 2-3% in 2012) and emerging market as well as transshipments. In terms of Europe, mgt continues to see tough conditions and expect volume to be flattish YoY. For 2013 DPU, mgt didn’t give specific number but hinted that DPU is likely to be under pressure. This is mainly because, in order to maintain 2012 DPU, the company has used the pre-funded capex of HK$700m to make up the shortfall of operating cashflow in 2012. As a result, the starting point for the 2013 distribution will be lowered by a similar amount. We note that although FY13 will have a market-expected dip in DPU, HPHT remains a solid yield play (8% p.a.) when put in perspective with S-REITs which currently trade closer to 5% p.a. Ratings as follows: Detusche maintains Buy with $0.83 TP Kim Eng maintains Buy with $0.93 TP Daiwa cuts to Hold from OutPerform with $0.80 TP CS maintains UnderPerform with $0.69 TP

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