Hutchison Port Holdings Trust - OCBC Investment 2016-09-14: Impact from Hanjin Shipping likely small

HUTCHISON PORT HOLDINGS TRUST NS8U.SI

Hutchison Port Holdings Trust - Impact from Hanjin Shipping likely small

Hanjin Shipping, the world’s seventh-largest container shipper, filed for receivership in South Korea on 31 Aug.
According to Bloomberg (13 Sep), Hanjin Shipping has about 93 ships, including 79 container vessels, stranded at 51 ports in 26 countries.

Hong Kong International Terminals (HIT) of Hutchison Port Holdings Trust (HPHT) has been charging fees for the release of containers stranded in the port by Hanjin’s collapse. According to JOC, for a 40-foot equivalent unit, HIT is asking for a HK$10k administrative charge and refundable matching deposit. The Hong Kong Shippers’ Council is reported to have been considering legal challenges against these fees.
In terms of the oversupply situation in the shipping industry, we do not believe Hanjin’s bankruptcy would have a large impact in the longer-term, given that the physical ships may be redeployed after Hanjin’s legal future is sorted out. At this point in time, we believe the impact of Hanjin Shipping is likely to be minimal.
We maintain our HOLD rating on HPHT with a fair value of US$0.46.

Deborah Ong OCBC Investment | http://www.ocbcresearch.com/ 2016-09-14

OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 0.46 Same 0.460