HPH Trust

HPH Trust: UOB Kay Hian maintains Buy with US$0.96 TP. House note that there has been a strike in HPHT’s HIT since 28 March and operations at HIT were smashed in the first few days but have resumed to 80% of the normal level after some workers went back to work. The direct financial impact is insignificant (less than 2% of 2013F net income) but is still too early to evaluate the long-term impact. Add that upon HIT’s request, some of HIT’s customers have switched to neighbouring ports, such as Shenzhen, Kaohsiung and ports in Vietnam, for temporary berthing. The long-term impact will depend on how long will it take for operations to go back to normal. If the strike can be resolved in the near term, it is unlikely that Hong Kong’s leading position as a transhipment hub in Asia (for its convenient customs clearance) will be overtaken.