HPH Trust: Deutsche upgraded HPH Trust to Buy from Hold, with TP unchanged at US$0.62, citing that after the recent share price correction, an entry now would provide an attractive 8.3%.
While macro risks are mounting and the possible global slowdown would weigh on HPHT’s earnings and dividends, HPH Trust is expected to benefit from tailwinds coming from higher tariff rates and moderated labour cost increase.
In addition, cargo moving to US remains robust, and the RMB depreciation bodes well for China’s exports.
Interest expenses for the trust is also expected to stay low given the weak macro conditions which prohibits higher rates.
On the dividend front, 2H15 DPU would immediately offer investors a 4.5% yield and even under bear case, 2016 expected yield would remain above 7%, in line with historical average.
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