HPH Trust

HPH Trust: OCBC initiates with Buy call and US$0.76 TP. House note that the biggest container port operator in China’s Pearl River Delta region by throughput, with market shares of around 70% at Hong Kong’s main Kwai Tsing Port and 47% in Shenzhen. Believe that its market dominance in the Pearl River Delta puts the trust in a strong position to capture the region’s trade flows of manufacturing exports and raw material imports, including intra-Asia cargo. At the current price, believe that the trust offers upside potential, including distributions, of more than 10% over the next 12 months as the recovery in the US and Europe gathers momentum. The main risk to investment thesis in the short term is a renewed slowdown in these major economies. Still, expect strong support for HPH Trust at its current price, given its attractive distribution yield of around 7%.