FY2021, HPHT reported a 110.1% y-o-y surge in earnings of HK$1.75 billion, from earnings of HK$831.4 million a year ago.
HPHT’s FY2021 DPU to 14.50 HK cents, up 20.8% from FY2020’s DPU of 12 HK cents.The FY2021 DPU stood higher than the guidance of 11-13 HK cents given previously, according to a report by DBS Group Research.This translates to an earnings per unit (EPU) of 20.06 HK cents, compared to EPU of 9.54 HK cents.
As at end-December, cash and cash equivalents stood at HK$11.05 billion.
In the markets, the impact for the higher Federal Fund Rate is expected to be “relatively small” for the trust, as over 80% of its debt has a fixed interest rate.
DBS REITERATE STRONG BUY FOR HPHT AND UP TARGET PRICE TO USD 37 cents
DBS Group Research analyst Paul Yong has kept his “buy” recommendation on Hutchison Port Holdings Trust (HPHT) after the trust’s “stellar” results for the FY2021 ended December roundly beat Yong’s expectations.On Feb 9, HPHT reported
FY2021 net profit of HK$1.75 billion ($301.0 million), up 110% y-o-y
on exceptional storage, while its distribution per unit (DPU) for the FY2021 came up to 14.5 HK cents, above the brokerage’s street high forecast of 14 HK cents.The trust’s strong performance, which was mainly led by higher storage income, is expected to partially continue into the FY2022 as port congestions remain high.On account of this, Yong has increased his earnings estimates for the FY2022 by 25%. Earnings for the FY2023 are also expected to remain stable from FY2022 on higher container handling rates and lower costs, which will offset lower storage income.HPHT’s earnings are expected to remain resilient in the next few years, says Yong. “[This is] despite throughput volume uncertainty in the near term and higher interest rates, as the trust has undertaken a series of cost management programmes to lower its cost base and has reduced its total debt by nearly HK$5 billion in the last five years,” he writes in his Feb 10 report
Looking ahead, Yong sees more upside to HPHT’s DPU guidance of 14.5 – 15.5 HK cents in FY2022.“With strong cash flow generation, resilient earnings, and a rapidly improving balance sheet, we believe there is room for HPHT to raise dividends further in the next few years. Stock is attractive at 7.9% prospective yield in our view,” he says.To this end, Yong has also upped his target price estimate to 37 US cents (50 cents) from 33 US cents previousl