HPH Trust

HPH Trust: DBS maintains Buy with TP cut from US$1.05 to US$0.95 with lower FY11/12 DPU estimates of 4.5% and 6.5% respectively. Yantian throughput figures fell 6.9% yoy in Aug 2011 and is down 0.5% yoy YTD. In view of weaker peak season volume growth assumptions in Yantian have been cut. However, though GDP/trade growth is to be sub-par it is not expected to be negative which current valuations seem to imply. Forecasted US figures are at 2.3-2.4% (qoq seasonally adjusted) in 3Q11 and 4Q11, a far cry from recession. Even at lower DPU estimates, trust has attractive yield of 8.5%-9.0%. House notes that in a bear case scenario which is a deeper slowdown, TP is still at US$0.85 offering value at current prices.