Thursday, June 25, 2015

Hutchison Port Holdings Trust

Hutchison Port Holdings Trust (HPHT): May YTD throughput across HPHT’s aggregated terminals is down >1% with HIT off <1%, but mix is expected to have deteriorated as per 1Q15.

The company will still need to borrow to fund (HK$0.07/unit) its guided distribution (HK$0.33/unit), which investors should provide it no credit for.

Kwai Tsing (where HPHT’s primary Hutchison International Terminal is located) volumes have fallen 30% YTD, mostly attributable to competitor Modern Terminals Limited. It has lost this throughput because major customers Orient Overseas International Lines and Maersk Line have relocated activity to West Shenzhen ports in reaction to congestion and/or renegotiation tactics.

Credit Suisse has maintained its UNDERPERFORM rating and reduced its TP from $0.65 to $0.59.

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