Dec. 28 (Xinhua) -- Container throughput at China's major ports continued to enjoy upward momentum in the middle of December, data from an industrial association showed.
From Dec. 11 to 20, container throughput at China's eight key ports increased 9.8 percent year on year, with the growth rate at Shanghai, Ningbo and Shenzhen ports exceeding 10 percent, according to the China Ports and Harbours Association.
Specifically, the container throughput for foreign trade rose 11.9 percent from a year earlier during the same period, up 7 percentage points from that posted in the previous 10 days.
The boom in container throughput for foreign trade came amid the rapid expansion in China's exports, which jumped 21.1 percent year on year in November in U.S. dollar terms, the fastest growth since February 2018
Recommend BUY with raised TP of US$0.27 given HPH Trust’s positive earnings recovery trajectory.
We believe that HPH Trust’s share price has more room to re-rate in 2021 given its firm earnings recovery momentum. We also see further upside potential to our TP if the company confirms its intention to raise its dividend payout for FY22F and beyond after its debt repayment programme ends in FY21F.
On track for strong 2H20 earnings and a sustained recovery ahead. We have raised our FY20F and FY21F earnings by 10% and 7% respectively after factoring in higher throughput volume assumptions. We expect exports out of China to remain firm for at least the first half of 2021 as many parts of the world remain in lockdown while a synchronised global recovery in the second half would also be a boost.
More confident of higher dividends from FY22F onwards. With an improving earnings outlook bolstering the Trust’s cash flow and balance sheet, we are confident that the Trust will not look to extend its HK$1bn per annum debt repayment plan beyond 2021 and is therefore likely to raise its DPU payout significantly from FY22F onwards.ValuationRaise TP to US$0.27; maintain BUY. Our DCF-based TP is raised from US$0.22 to US$0.27 to account for our raised earnings forecasts and as we roll over our base year to FY21F, while maintaining WACC at 8%.
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