Maybank Kim Eng initiated coverage of Hutchison Port Holdings Trust with a ‘buy’ rating and a target price of US$0.925 ($1.137), citing an attractive distribution yield, resilient earnings and growth potential.
Units of HPHT were up 1.3% at US$0.755. They have gained 21.8% so far this year, but are still down 21% since HPHT’s market debut in March 2011.
At current prices, HPHT offers a distribution yield of 8.4-9.1%, higher than most other real estate investment trusts and business trusts.
“Its current depressed price provides a rare opportunity to own a resilient business which would also be a beneficiary of a global economic recovery,” said Maybank in a report.
HPHT’s ports have shown throughput growth of about 10% a year on average from 1993 to 2011, but even during the global financial crisis in 2008 and 2009, volumes fell only 1 and 4% respectively, demonstrating its earnings resilience.
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