Units of Hutchison Port Holdings Trust fell as much as 3.7% after it posted lower-than-expected quarterly earnings, but analysts remain optimistic about its prospects.
By 10:43 a.m., Hutchison units were down 2.4% at US$0.80 ($0.98), with 16.8 million units traded, more than half of its full day average volume of 29 million units over the last five sessions. Its units have surged 29% so far this year.
Hutchison said its net profit for July-September fell 15.1% to HK$601.7 million, which Deutsche Bank said was below its expectations due mainly to non-operating items.
The trust’s operating profit was also hit by exchange losses, and higher expenses, Deutsche said in a note, maintaining its ‘buy’ rating and target price of US$0.86.
Despite volume growth at Hutchison’s ports, DBS Vickers said, a higher proportion of transhipment volumes and empty containers has led to lower selling prices and subdued revenue growth.
However, the brokerage noted that better-than-expected economic data from the U.S. bodes well for Hutchison, and advised investors to buy its units on any near-term weakness.
DBS raised its target price for Hutchison to US$0.88 from US$0.85 to reflect lower market risk premium, and maintained its ‘buy’ rating.
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