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Quick Take on HPH Trust: Analysts touting 9% yield

We did an article some time back on HPH Trust. [Analysis here >>] Since then the price went down to a low of 59 cents and came back up at 68 cents. Why is this stock continue to be weak? Analyst are still thinking that there is a good risk versus reward for this.

  1. The general consensus during IPO was that HPH will grow 8.5% in 2011 and 8.4 in 2012. Turns out instead of growing based on GDP growth, volume have fell 4.6% instead.
  2. DMG Analyst think that the port assets owned by HPH are relatively mature and unlikely to deliver much more than single digit growth even if economic situation improve.
  3. CITI Analyst says the original estimate DPU was 5.9 US cents (45.88 HK cents) for 2011 and 6.59 US Cents (51.24 HK cents) for 2012 could be in jeopardy. He estimate that it may be 34 HK cents and 45 HK cents instead.
  4. CITI Analyst thinks HPH relatively expensive at 20 times earnings versus Cosco Pacific and China Merchant International Holdings.
  5. Analyst have indicated that the problem for HPH is that volume and export slowdown cannot be anticipated easily.
  6. Several trustee manager believe that the stock price have factor in a lot of the bad news.
  7. Analyst think that the support is at 60 US cents. They are forecasting DPU of 5.5 US cents for 2011 and 5.9 US cents for 2012.  That’s 8% and 8.6% yield based on share price of 68 US cents.

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