Should you go for Hutchison Port Holdings (HPH Trust) IPO? Skip to Content

Should you go for Hutchison Port Holdings (HPH Trust) IPO?

Its really to pop this question especially for an IPO that we read about, but for me evaluating an IPO is more:

  1. The climate the IPO is being issued at
  2. How well known is this IPO

Last year we have Global Logistic Trust and a lot of people got some great coffee money.

This issue will be no different. The climate is conducive for IPO and this issue is from the parent Hutchison Whampoa. That to me is even more reputable than Temasek.

This deal could possibly raised USD 3 billion which will make this the largest ever public offering in Singapore.

Predictable Income from Infrastructure Assets

Ports are assets that are defensive in nature. Income from ports tend to be predictable and therefore suitable for business trust.

We already have one listed that have a port as an infrastructure trust which is MIIF.

The question is whether they would issue dividends. This is probably important for Passive Income investors looking for Dividend Income.

Another question to ask is how leverage this will be eventually. Do note that the Achilles heel of MIIF and Babcock and Brown (currently Global Investment) was that although they seem to be debt free, the underlying assets were bought over with huge amounts of debt.

When the debt crisis hits they cannot refinance the debt or the cost of refinance get so high that it is a question if the can get it refinance.

As a summary good ipo, but we still do not know if you  will be a carrot head to hold this long term.

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