HPH Trust

HPH Trust: CS noted that margins have expanded while volume remains soft with 3Q13 NPAT falling 13% y/y, at HK$527m, below CS estimates of HK$562m and consensus of HK$543m. Lower volumes of empty boxes hit throughput, which has fallen 2% YTD as there were 2 typhoons in the period and liner cost savings, which affected aggregate volumes especially at Yantian (down ~4% y/y) – but was offset by higher ASPs, which have risen 25% y/y. Management noted that fully laden export volumes were flat or modestly ahead across most trades in 3Q13 and was generally sanguine with respect to 4Q13 and 2014. CS cut estimates by 9% (2013) and 13% (2014) to reflect the 3Q miss and higher prospective tax rates. With management confident of achieving DPU of HK$0.4, translating to 2013E yield of 6.7%, CS is confident that it could be >7% next year, which forms their basis of a lower TP: $0.84 (previously $0.86) with O/PF maintained.