Hutchinson Port Holdings Trust

I have been hearing that HPH Trust has been battered since IPO. Li Ka Shing-related stock get hit? Did some reading and checks.... Think this analyst report explains it well . Kudos to DMG 's Jason Saw:

Poor performance since IPO; mispriced from the start? Share price has declined 39% since IPO (to US 62 cents). We think the underperformance can be attributed to two parts: (1) prospectus
guidance of 8% throughput growth forecasts for HIT and Yantian in 2011 were too aggressive given that 1Q11 (actual) and provisional 2Q11 (provisional) container throughput data were already pointing towards lower growth of around 4%.


Based on our model, assuming 4% container throughput growth in 2011-12F rather than the 8-9% growth guided for HIT and Yantian in the prospectus, the fair value for HPH Trust would be US$0.81 at that time; (2) Recent throughput trends suggest that volume growth at Yantian may be closer to zero while growth at HIT and COSCO-HIT could be around 3%. We believe this is another reason why the stock has underperformed.

DBS has forecast a 10% dividend yield, which is pretty sweet. Hutchinson unit price was US59.5 cents.

Its analysts said Oct and Nov Yantian throughput changed by +7% y-o-y and -4% y-o-y
 respectively.

·                 HK volumes on track for 4% y-o-y growth for 2011, but flat growth for  Yantian.

·                 Steady throughput in 2012 should underpin strong cash flow.

·                 Stock offers a handsome 10% dividend yield. Maintain BUY, with US$0.85  TP.

The yield is indeed attractive at stk price of 60+ usd cents . So the insiders have been buying . Amazing isn't it that Hutchison managed to sell its IPO some 10 months ago at US$1.01. Even more amazing, Goldman Sachs set a target price that was higher than IPO. LOL. 

Yes, 10% yield is too good to ignore. DBS' target price is US$0.85 and translates to a 7.1% yield.
Is HPH Trust the highest dividend yielding stock in Singapore, as DBS says?

I can think of Adampak and OKP which both have about 10% yield too. Any others?

even at throughput growth assumptions of 2%, HPH Trust dividend yield is estimated by Deutsche Bank to be more than 8.5% (based on 66-ct stock price).

Latest news of China's ban on P3 alliance, and possible ramifications on HPHT profitability. Got this from somewhere...

Asian ports are still digesting the ramifications of China’s unexpected decision yesterday to reject the P3 Network application, putting the kibosh on a vessel-sharing agreement between Maersk Line, MSC and CMA CGM that was set to dominate the container shipping industry. Most terminal executives declined to comment while they searched for more details, but all expressed surprise that approval from the Ministry of Commerce (Mofcom) had been denied. But it was a welcome surprise to staff at some terminal operators who learned of the rejection from the JOC. “That is great news,” said a member of the management staff at one terminal operator. “The lines will have less bargaining power and will not be able to force our rates down.” Staff at another terminal also welcomed the decision that forced the carriers to scrap the alliance, saying some P3 ports of call in Asia stood to lose services when the carriers consolidated their routes. Now that the alliance is history, potential volume losses will have to be dealt with by ports in Asia, said an executive at a large port operator who declined to be named. He said terminal operators will need to understand how the three lines plan to deploy their vessels now that the P3 has been abandoned, and with a pooled fleet of 255 vessels, the rerouting may require a fair amount of creativity. “Depending on their routing of services, some terminals may gain more volume while others may lose some. It may take some months before the situation is clear,” he said.

Looks like the jury is still out as to whether it is beneficial or threatening to HPHT as breaking the corroboration of the big shipping lines will deny them muscle to negotiate the rates down, but this is counterbalanced by potential volume losses as P3 is more efficient for optimising the cargo.