Hutchison Port Holdings Trust

[choonlim]

Does any VB know why this stock has become so unloved today?

The drop in price to this level is unprecedented and quite sudden.

Any news on latest happening out there to share? Thanks so much.

Is it sudden? Their price has been on a steady decline for past few years, matching their shrinking profit especially for past few quarters.

[Retired@52]

Does any VB know why this stock has become so unloved today?

The drop in price to this level is unprecedented and quite sudden.

Any news on latest happening out there to share? Thanks so much.

Is it sudden? Their price has been on a steady decline for past few years, matching their shrinking profit especially for past few quarters.

Hi Sykn, Choonlim is right. The slight is not sudden. It slights from day One.

Date                      Price

IPO                       $1.00 +/-
July 2011              $0.85 +/-
July 2012              $0.78 +/-
July 2013              $0.73 +/-
July 2014              $0.72 +/-
July 2015              $0.60 +/-
July 2016              $0.46 +/-
July 2017              $0.43 +/-
July 2018              $0.28 +/-

Today you can get it for $0.26

[money]

i still remember that the HKSE rejected this listing; only our local exchange is so hungry and greedy for fees to take in this counter. The same goes for the many penny china stocks they accepted for listing from 2005-2007, seriously are they so desperate for fees?

[weijian]

hi money,
The "rejection" by HKEX came about because at the point of listing, HKEX did not have the business trust structure that Superman Li would have wanted (pay out of FCF, require 75% to vote out the manager etc). Subsequently, HKEX changed its rules in the same year and attracted Superman Jr to list on HKEX using a similar structure with HKT Trust. This is no different from HKEX and SGX losing to NYSE on Alibaba and Manchester United respectively, due to the former's lack of a dual class structure.

Looking at the uproar in HK then and HKEX's subsequent actions to introduce something similar, probably the rejection was the other way around i suppose?

In March 2011, Hong Kong lost a US$5.5 billion IPO when Hutchison Port Holdings Trust, controlled by Asia’s richest man, Li Ka-shing, listed in Singapore as Hong Kong did not allow business trusts. Trusts come with unique shareholding structures that Hong Kong opposed for years, though they have been welcomed in markets from Bangkok to Kuala Lumpur.

That loss prompted heated debate among bankers, government officials and legislators concerned that Hong Kong was losing a competitive edge on listings. Months later, officials were able to create a structure similar to business trusts – called a single investment – and in November of that year PCCW, headed by Li’s son, raised US$1.2 billion with the listing of HKT Trust.

https://www.scmp.com/business/companies/...ting-rules

[cfa]

The reality is many big blue chips chose HKSE over SGX , the giant banks /Companies from China . Even our own listed OSIM also applying to list there after taking private . It seems our World-class SGX  can only take what they don't want .

[weijian]

hi cfa,
If you have your business in China, you will most probably be courting criticism (like Jack Ma did) by not listing in China or HK. You are right that the reality is the big boys from China (and others like Prada and AIA) choose HKEX. But we gonna also recognize the reality without a hinterland like HK has, SGX never had a chance. In UFC terms, it is like squaring up Frank Mir (heavyweight) against TJ Dillashaw (bantam weight).

We probably should stop here about the contrast between HKEX and SGX to risk been out of topic.

[valueinvestor]

[b]Temasek/PSA keep averaging down non stop  after IPO . The loss is even more now . [/b]
[b]PSA is diving  deeper into this quick sand but Li Ka Sing is laughing to the banks.[/b]



[b]Brokers' take: OCBC downgrades HPH Trust to ' sell' DBS maintains ' hold' [/b]
WED, FEB 13, 2019 - 11:54 AM

OCBC Investment Research has downgraded its call on  Hutchison Port Holdings Trust (HPH Trust) from " buy" to " sell" , on the back of an unexpected HK$12.3 million (S$2.1 million) non-cash impairment loss, while DBS Group Research has maintained its " hold" rating on the counter, with a target price of US$0.26.  

OCBC' s current fair value estimate of US$0.22 represents a 9 per cent downside from the counter' s Feb 12 close of US$0.26.  

In a research note released on Wednesday, DBS noted that the trust' s non-cash impairment charges reflected an " uncertain outlook" and other structural changes within the shipping industry.  

" The non-cash impairment reduces NAV (net asset value) per unit by 31 per cent quarter on quarter to HK$3.07 or about US$0.39, which in turn means HPH Trust is trading at a historical P/B (price-to-book ratio) of 0.66x, using Feb 12' s closing price. " While this figure is still below the five-year average of 0.73 times, we no longer find HPH Trust&rsquo s price levels attractive, given the macro uncertainties," said OCBC analyst Deborah Ong.  


https://www.businesstimes.com.sg/companies-markets/brokers-take-ocbc-downgrades-hph-trust-to-sell-dbs-maintains-hold

[cfa]

Is Temasek/PSA reflecting why they were so confident in investing billions of $ in this sinking ship ?
What is their ''paper loss'' by now ?
US$5 billion or more ???

[karlmarx]

The management of HPH Trust said in its results announcement that the global external environment continues to be challenging, with trade tensions between the United States and China having heightened in recent months, with new tit-for-tat tariffs imposed in the second quarter of 2019."Trade protectionism, macroeconomic and political uncertainties, including the slowing Chinese and European Union (EU) economies and the yet-to-be-resolved Brexit from the EU, threaten the recovery of global trade," it said.

https://links.sgx.com/FileOpen/HPH%20Tru...eID=571516

...

While 'trade tensions' is the given reason of the weakness in earnings and distribution, the results showed a flat top line and an increase in financing costs. It looks more like 'banker tension' to me.

It also looks like they are continuing to partially fund distributions out of their depreciating land lease. I suppose there is no intention to renew the land lease, or maybe there is no expectation that it will be renewed.

If so, there could be a case for investment, but only if HPHT's income can be accurately determined.

[pencilin]

HK Tycoon Li Ka-Shing's Company Invests In World's Largest STS Hub Project In Malaysia
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By Iswarya Ravindran
Apr 05, 2019 02:27 AM

[img=748x0]https://datacdn.en.businesstimes.cn/data/thumbs/full/92214/750/0/0/0/official-signing-ceremony-ka-petra-sdn-bhd-and-hutchison-port-holdings-ltd.jpg[/img]Official Signing Ceremony Ka Petra Sdn Bhd And Hutchison Port Holdings Ltd(Photo: BCT Asia Associates)

KUALA LUMPUR - Malaysia's KA Petra and Hong Kong-based port operator Hutchison Port Holding Limited, controlled by Li Ka-Sing, joined together to develop the world's largest ship-to-ship (STS) Transfer Hub in Malaysia.
On April 2, both parties signed a Heads of Agreement (HOA), which witnessed by the Malaysian Prime Minister, Mahathir Mohamad.
Under the heads of agreement signed, KA Petra holds 70% interest in the project, whilst Hutchison Ports will take 30% stake.KA Petra and Hutchison will develop the STS hub and first fully dedicated facilities for STS transfer worldwide at an estimated cost of between $150 million to $180 million.

Shahrul Amirul, Executive Chairman of KA Petra said, "We embarked on the STS Hub idea two years ago as a solution to address the demand for more STS berthing space."
Amirul added, "we are now realizing the STS Hub dream."
The hub has the capacity to store over 9 million metric tons of petroleum products. It will be well positioned to become a major trading hub in the region, with the International Maritime Organisation IMO 2020 implementation (a regulation limiting sulphur content in marine fuels, from 1st January 2020).

Shahrul Amirul shared that the STS Hub is located in the Johor Bahru Port waters. It will utilize the dolphin mooring and berthing concept. Which allow the berthing of approximately 30 vessels for the transfer of petroleum-based products and LNG.
KA Petra estimates that GDP contributions from maritime sector activities in the STS Hub will be in the region of RM18 billion to the Malaysian GDP annually, equivalent to 1.5% of Malaysia's GDP today.
Eric Ip, Hutchison Ports Group Managing Director said, "Given our global port network, we are confident of introducing the many benefits offered in this STS Hub to our global shipping lines customers."
The construction of 1,214.06 hectare STS hub would be done in phases with the commencement expected within the next 12 months.


Will this benefit Hutchison port trust?