HUTCHISON PORT HOLDINGS TRUST (SGX:NS8U)
Hutchison Port Holdings Trust - Recovery Of Throughput Volumes
- Recovery of economic activities in China.
- Picking up of throughput volumes in 3Q20.
- Expecting a better 2H20.
Throughput volumes recovered from trough levels in 1H20
- Hutchison Port Holdings Trust's share price jumped 30% in November, which was likely due to easing impact from COVID-19 with a recovery in the container throughput volumes as countries exit from lockdowns and resumption of economic activities in China.
- The throughput volumes of Kwai Tsing and Yantian has recovered from the trough levels in 1H20 and saw a growth of 2. 6% and 26. 6% y-o-y respectively in Oct 2020. For 10M20, the container throughput of Kwai Tsing and Yantian rose 0.5% and 0.2% y-o-y respectively.
- Recall that Kwai Tsing and Yantian’s throughput fell 3% and 12% y-o-y respectively in 1H20. The decline of throughput of Yantian was more significant than that of Kwai Tsing in 1H20 as Yantian was an export hub which saw greater impact from weak export demand due to COVID-19 and US-China trade tensions while Kwai Tsing was positioned as a transshipment hub.
Higher fair value estimate of US$0.18
- As of 14 Dec’s close, Hutchison Port Holdings Trust (SGX:NS8U) is trading at 0.49x forward P/B which i s almost 0.5 s.d. below its historical mean of 0.56x. While we could see further recovery in 4Q due to catchup orders from COVID-19, outlook remains uncertain given global economic weakness and continued headwinds from U.S-China trade tensions.
- We raise our forecasted growth rate for overall throughput volume from -7% to -2% y-o-y for FY20 and reduce our cost of equity assumption to 8.5%. After adjustments, our fair value estimate increases from US$0.10 to US$0.18.
- See Hutchison Port Holdings Trust Share Price; Hutchison Port Holdings Trust Target Price; Hutchison Port Holdings Trust Analyst Reports; Hutchison Port Holdings Trust Dividend History; Hutchison Port Holdings Trust Announcements; Hutchison Port Holdings Trust Latest News.
Chu Peng
OCBC Investment Research
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https://www.iocbc.com/
2020-12-18
SGX Stock
Analyst Report
0.18
UP
0.101
