HPH Trust

HPH Trust: From the recent DB Asia Conference 2013, management highlights that workers on strike at HIT now have fully returned. However, it still takes a few more weeks for volume returning as liners need to reroute their port of calls. 2Q throughput at HIT would be under pressure due to the strike. In terms of trade, cargo going to US has slowed down in recent months in its Yantian ports vs. 5-7% y/y growth in 1Q, the growth during April-May largely remained flat y/y. One possible explanation was that US retailers have built up their inventories in 1Q, which led to slow shipments at the beginning of 2Q. However, mgmt thought that no need to be panic at this point of time. As long as US growth remains on track, flow of trades will come back. The cargo going to Europe remained soft, with no sign of improvement. For DPU, mgmt continues to stick to its guided range of HKD40-44¢. However, given the strike and recent softness in trade, mgmt believes that dividend is more likely to be within the low-to-mid range. Base on last closing price of US$0.81, HPH Trust trades at an implied distribution yield of 5.9% based on a distribution of HKD40¢. DB maintains its BUY rating, TP of US$0.92.