News on HPH Trust

Lim&Tan on 12 Feb 2014

*Hutchison Port Holdings Trust: 4Q13 one-off items hit P&L*

*Summary: *HPHT reported 4Q13 earnings results that were lower than ours
and the street's expectations due to one-off items: (1) concession to
shipping lines after previous industrial action at HIT, (2) write-off of an
upfront fee after the US$3.6b bank loan refinancing, and (3) exchange loss
from the conversion of USD to HKD for repayment of bank loan for the ACT
acquisition. Revenue for 4Q13 fell 0.8% YoY to HK$3.12b. Total operating
expenses for the quarter increased by 10.9% to HK$2.17b. PATMI fell 47% to
HK$335m. Management is guiding mid-single digit growth in volume for its HK
and Shenzhen ports, with 1-2% increase in ASP. Due to the expiry of tax
holidays for some phases of Yantian, for FY14, management is guiding an
effective tax rate of 19-20%, a significant increase over FY13's 12%.
Lowering our DPU forecasts, we reduce our FV on HPHT from US$0.74 to
US$0.63. We maintain a *HOLD* rating on HPHT. HPHT is trading at a FY14F
dividend yield of 8.0%. (*Sarah Ong*)

Personally, I am holding 20 lots of HPH Trust.