Company Name: HUTCHISON PORT HLDGS TRUST S$
| Research House: Daiwa | Price Call: BUY | Target Price: 0.84 |
Daiwa cuts Hutchison Port Holdings Trust target to US$0.84 from US$0.90 after lowering its 2012-14 EPS forecasts by 1%-8% to account for the recent throughput-growth slowdown in southern China and higher interest costs expected in 2014. It now expects 2013-14 DPU to be flat at around HK$0.50, vs previously expecting growth.
The house notes HPHT has deferred annual capex by a year, making its targeted 2012 DPU of HK$0.51 achievable, but as the trust has used up its pre-funded HK$2.8 billion ($443 million) cash in 2012, Daiwa believes 2013-14 DPU growth is unlikely unless management defers some capex further in 2013-14.
“Based on our revised DPU forecasts, the stock currently offers a 2013E dividend yield of close to 9%, which we believe remains attractive. Thus, we maintain our Outperform rating.” The stock is down 0.7% at US$0.75.
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