Hutchison Port Holdings Trust - HK Kwai Tsing throughput recovery continues in Dec
- Hong Kong Kwai Tsing container throughput posted a +12.7% YoY gain to 1.4m TEU for the month of Dec 2016, a sign of continued recovery with YoY growth rates steadily improving since the 17.6% decline clocked in Feb 2016.
- On a yearly basis, HK Kwai Tsing container throughput fell 2.4% YoY to 15.2m TEU, close to 2009 levels or the lowest in the past ten years.
- For Hutchison Port Holdings Trust (HPHT), we keep to our assumptions for throughput growth of 2% in FY17 for now.
- Looking forward, we expect the alliances to negotiate contracts with terminals, a process which may introduce volatility in both throughput and tariff rates.
- Nonetheless, we believe HPHT is in a good stead to compete for contracts, especially after its Kwai Tsing comanagement agreement.
- We reiterate BUY on HPHT with a fair value of US$0.46.