SG: MARKET PULSE: HPH Trust, SPH (4 Sep 2013)

Stock Name: HPH Trust US$
Company Name: HUTCHISON PORT HOLDINGS TRUST

Research House: OCBC

Price Call: BUY

Target Price: 0.76

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: OCBC

Price Call: HOLD

Target Price: 4.14

MARKET PULSE: HPH Trust, SPH

4 Sep 2013

KEY IDEA HPH Trust: Safe harbour Hutchison Port Holdings Trust (HPH Trust) is the biggest container port operator in China's Pearl River Delta region by throughput, with market shares of around 70% at Hong Kong's main Kwai Tsing Port and 47% in Shenzhen. We believe that its market dominance in the Pearl River Delta puts the trust in a strong position to capture the region's trade flows of manufacturing exports and raw material imports, including intra-Asia cargo. At the current price of US$0.725, we believe that the trust offers upside potential, including distributions, of more than 10% over the next 12 months as the recovery in the US and Europe gathers momentum. The main risk to our investment thesis in the short term is a renewed slowdown in these major economies. Still, we expect strong support for HPH Trust at its current price, given its attractive distribution yield of around 7%. Initiate with a BUY rating and target price of US$0.76. (Conrad Tan) MORE REPORTS Singapore Press Holdings: Continued headwinds for print We see SPH's REIT spin-off as a positive move and believe management's decision to hold a 70% majority stake makes significant sense. However, the latest 3QFY13 figures presented a picture of contined headwinds for the group's core print business given the cumulative impact from cooling measures on property and automobile ads. 3QFY13 ad revenues fell 4.5% YoY in 3QFY13 and circulation revenues also dipped 3.2% YoY. With current headwinds for the print business and limited visibility in terms of catalysts ahead, we believe the risk-reward proposition for the counter has turned fairly neutral. Downgrade to HOLD with a lowered fair value estimate of S$4.14, versus S$4.94 (before the REIT spin-off) previously. Our barometer for an upturn in outlook ahead consists of two key groups of operating metrics: for its print businesses - ad and circulation revenue growth; and for its retail property segment - expedient and accretive capital deployment. (Eli Lee)

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