Hutchison Port Holdings Trust - OCBC Investment 2018-10-24: 3Q18 Earnings Preview

HUTCHISON PORT HOLDINGS TRUST (SGX:NS8U)

Hutchison Port Holdings Trust - 3Q18 Earnings Preview

We expect Hutchison Port Holdings Trust’s (HPHT) upcoming 3Q results to be relatively weak.
Industry data shows throughput for Kwai Tsing Container Terminals falling 8.1%, 3.9% and 16.6% y-o-y for Jul, Aug and Sep respectively. Cumulatively, 3Q18 Kwai Tsing throughput is down 9.6% y-o-y while 9M18 throughput is down 5.6% y-o-y.
Meanwhile, industry data for Shenzhen container throughput showed a -3.0%, +2.3%, -6.9% y-o-y growth for Jul, Aug, and Sep respectively. Cumulatively, 3Q18 Shenzhen throughput grew -2.6% y-o-y while 9M18 throughput is flat with -0.5% growth.

We note that soft 3Q results may add to poor sentiment in the near-term. That said, HPHT is currently trading at a 0.43x forward P/B (Bloomberg consensus) or more than 2 standard deviations below its average since listing in 2011.
Pending further details from the upcoming results release, we maintain BUY with a US$0.36 fair value.

Deborah Ong OCBC Investment Research | https://www.iocbc.com/ 2018-10-24

SGX Stock Analyst Report BUY MAINTAIN BUY 0.360 SAME 0.360