HPH Trust

HPH Trust: Slightly better than forecasted results but throughput disappoints. DPU of HK 14.3c with ex-date on 10 Aug 2011. Rev at 3.4b was -2.6% from forecasted with net profit at HK$653.7m +13.2% from forecasted. However both throughput (volume of container boxes) and TEU were below mgmt expectations with downside risk to throughput growth in 2011. This could be offset by cost savings and higher rev per TEU in 2H11. Of note, Pearl River Delta’s throughput growth, up 3% yoy was slower than rest of China due to economic conditions in US & Europe. Due to shortening order lead time, there is little visibility into peak season and currently mgmt maintains 2011 DPU guidance of HK 37.4c. HPH Trust now trades at P/B of 0.7x with annualized yield of approx 7.5%. Current yield for this yr (9.5 mths of operations) is expected at 6.5% on mgmt figures. Deutsche maintains Buy with TP$0.94 lowered from prev $1.08. HSBC maintains Neutral with TP$0.81