Hutchison Port Holdings Trust

Superman always squeezes to the last drop - so is there any left in his cashed out exercises...

(31-03-2013, 11:58 AM)Nick Wrote: The ports have a fixed lifespan - HK ports concession ends in 34 years while the Chinese ports matures a few years after. At the moment, HPHT is not retaining any of its cash earnings to repay its debt nor is it conserving cash to replenish its assets in the future. Is this policy sustainable or do you foresee concession extension with minimal charges in the future ? If not, the share price will be 0 in 2-3 decades time since the cash-flow generated thereafter will be used to repay its debt ? Or am I missing out something here ?

Actually the risk is higher since they need to renew the license every 3 years with the authority. We should note that the yantian phase 3 expansions have concessions till 2055. As 30 years is a long time from now, it will be prudent to take investment return in Hpht as a return of capital... And if they can maintain/ or grow their DPU as promised. One could get back their capital in the next 10-15 years depending on the entry price. Any gain after 10-15 years will be the gain, and if the market still value it at current price then wola, if not it will be a poor investment.

Demonstrations hit HPH Trust's HK port
By
Lee Meixian
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HPHPH3401

Port workers claiming against stevedoring contractors for a pay rise, together with their supporters, on Monday gathered to demonstrate at Hongkong International Terminals Ltd (HIT), which is a unit of Hutchison Port Holdings Trust (HPH Trust) - PHOTO: HUTCHINSON PORT HOLDINGS (HPH) TRUST

Port workers claiming against stevedoring contractors for a pay rise, together with their supporters, on Monday gathered to demonstrate at Hongkong International Terminals Ltd (HIT), which is a unit of Hutchison Port Holdings Trust (HPH Trust).

"These stevedoring contractors provide services to HIT as well as the other terminals in the Kwai Tsing port of Hong Kong. These port workers are not employees of HIT," the trust clarified in a stock filing to the Singapore Exchange.

"Whilst operations at the terminals are continuing at this time, truck traffic within the vicinity of the demonstration has been slowed down and has to be diverted as appropriate," it added.

The trustee-manager, Hutchison Port Holdings Management, has been pro-actively monitoring the situation and encouraging HIT contractors to "engage in dialogue with their workers to bring an amicable resolution to the situation." It is also working closely with the authorities to ensure the safety of HIT's personnel and that order at the terminals is maintained.

The Straits Times
www.straitstimes.com
Published on May 01, 2013
New terminal eats into Hutchison Port Holdings Trust's profit

By Rachel Scully

THE acquisition of a new container terminal in Hong Kong drove costs up and sent profit down at Hutchison Port Holdings (HPH) Trust for the first quarter.

Earnings for the three months to March 31 fell 15.5 per cent to HK$380.3 million (S$60.5 million) compared with the same period last year, although revenue rose 1.1 per cent to HK$2.87 billion.

The trust said the marginal change in revenue was due to the varying numbers of containers handled by its port businesses.

The container throughput at some of its terminals in Kwai Tsing, Hong Kong, fell for the first quarter from the same period last year due to weaker cargo traffic.

By contrast, the container throughput of its terminals in Yantian, Shenzhen, climbed 6.3 per cent due to growth in transhipment, empty and non-United States or European Union cargo.

HPH Trust's first-quarter other operating expenses were HK$256.9 million, a 36.2 per cent rise from the same period last year. This was due to the performance fee and costs related to the acquisition of Asia Container Terminals on March 7.

Earnings per unit for the quarter was 4.37 Hong Kong cents, down 0.8 cent from the first quarter last year. Its net asset value per unit fell 23 cents to $7.48 compared with the three months to Dec 31 last year.

No distribution per unit was announced. HPH Trust is a unit of Hutchison Port Holdings, a port investor, developer and operator.

In January 2011, Hutchison Whampoa, the parent company of HPH, announced plans to spin off its deep-water container port businesses in Hong Kong, Macau and the Guangdong province.

The trust containing these assets listed on the Singapore Exchange in March 2011.

HPH Trust units closed down 0.5 cent at $1.02 yesterday.

rjscully@sph.com.sg

yantian should be still growing

from sinoship news
Beijing: The south China port of Shenzhen will surpass Hong Kong port and become the world’s third largest container port this year, according to a report released by the Center for Forecasting Science at the Chinese Academy of Sciences in Beijing yesterday.
According to the report, Shenzhen port will complete 23.3-23.5m teu in 2013, an increase of 1.6%-2.5% year-on-year, surpassing Hong Kong for the first time. Hong Kong, once the world’s largest boxport, suffered a 40-day strike this year. In the latest issue of SinoShip magazine we look at the future of Hong Kong and Shenzhen ports, the article can be read HERE. [19/06/13]

Slower growth in China port throughput worries China Merchants

http://www.scmp.com/business/companies/a...-merchants

Seems growth in mainland ports are slowing down (but still positive) while HK ports throughout contracted in April and May due to the strikes. I think HPHT recent M&A could offset the decline in revenue going forward.

(Not Vested)

HPH results are out:
http://infopub.sgx.com/FileOpen/HPHTrust...eID=249794

as I posted on march
"The projected Capex for 2012 is 1.1 billion, and 1.7 billion HKD for 2011, assuming capex of 1.5 billion and OCF remain constant, and they payout 100% of FCF, the payout for 2013 will be reduced to 32HK cents. A rather drastic drop but still a 6% yield for me. Any better performance is a bonus for me."

So the 1H results is within my tolerant level but nontheless very disappointing, I expect them to be able to match the base dividend of 45.88 cents, given the acquisition of ACT, guess it will be a tall order going forward. (So much for yield accretive acquisition )

Net margin has continue to deteriorate, Hong Kong ports are losing their competitiveness, subtract ACT from container throughput, it actually decreased by 20.1% as compared to the same quarter in 2012.

Cash generated from operations is better compared to a year ago, but there is no significant increase in capex, and management has mentioned they will not hold back capex anymore in 2013, so there will be another 700 million to 1 billion capex to be incurred 2H, i can't see how much more dividends that can give out in 2H as compared to 1H.

Some throughput volume might be affected by the Hong Kong workers' strike, but since traffic is directed to YICT and other berths, I doubt the impact is that significant.

Vested but reviewing, maybe some injection/acquisitions of assets by Hutchinson i.e shanghai in high growth areas would reverse the decline, but HPHT prospectus mentioned they will focused in the pearl delta area, with China growth and factories slowing, I doubt ShenZHen would be able to deliver strong growth, maybe just sustain performance

(30-07-2013, 10:29 PM)Greenrookie Wrote: ...
Vested but reviewing, maybe some injection/acquisitions of assets by Hutchinson i.e shanghai in high growth areas would reverse the decline

I always find acquistions worrying, especially so when the assets are purchased from the parent companies. The assets are never priced cheap

Apparently DBS has a vastly different view from me

http://www.remisiers.org/cms_images/rese...BS_HPH.pdf

Perhaps this is why the counter rebounded strongly.

Thank you, DBS, for providing a smooth exit for me

(Not vested)

(30-07-2013, 11:53 PM)safetyfirst Wrote:

(30-07-2013, 10:29 PM)Greenrookie Wrote: ...
Vested but reviewing, maybe some injection/acquisitions of assets by Hutchinson i.e shanghai in high growth areas would reverse the decline

I always find acquistions worrying, especially so when the assets are purchased from the parent companies. The assets are never priced cheap

There is no incentive for the parent company to sell cheaply.

Regarding acquisitions, always refer to the following 2 points when in doubt:
- If the asset is worth keeping, the parent company will not sell
- If the parent wants to sell a good asset, it must be for an exorbitant sum

Investors can draw their own conclusions........