HPH Trust

HPH Trust: DBSV reiterates Buy with TP US$0.745, says tough times won’t last long. Volume growth at the Trust’s HIT terminals in HK has been below par so far in FY13, with the port workers’ strike in Apr adding to the woes. HIT volumes could be down more than 10% y-o-y in 2Q13, with the high base in 1H12. Yantian Port volumes remain on course for mid-single digit growth as expected, but overall volumes in FY13 could be flattish, despite contribution from newly acquired ACT terminals in HK. But the house thinks the worst should be over. US volumes show relatively positive signs and upcoming peak season should provide more visibility for investors. Key indicators in the US are looking up. US payrolls data came in better than expected recently, and while unemployment rate didn’t fall, consumer sentiment is improving and US inventory to sales ratio has maintained its upward momentum, giving some confidence that trade flows in 2H13 will improve. HPHT share price has corrected significantly in line with market sentiment. DBSV believes it has more than priced in lower DPU expectations.