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Hutchinson IPO
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Author:  mkttalk [ March 10th, 2011, 5:45 pm ]
Post subject:  Hutchinson IPO

Hutchison makes waves with port trust IPO launch
Public offer closes on March 14, trading expected to begin on March 18


(SINGAPORE) Singapore's largest initial public offering (IPO) which was launched yesterday - a Hutchison Whampoa spin-off in the form of Hutchison Port Holdings Trust (HPH Trust) - is seeing 'overwhelmingly enthusiastic' response, even in a jittery equities climate that has not been kind to recent IPOs.

Based on the offering's price range, the implied distribution per unit yield for the forecast period of 2011 is between 5.5 per cent and 6.5 per cent. Next year, this is expected to increase to between 6.1 per cent and 7.2 per cent.

Author:  mkttalk [ March 10th, 2011, 5:49 pm ]
Post subject:  Re: Hutchinson IPO

SMALL investors are getting a chance to take part in what looks set to become Singapore's largest initial public offering (IPO) - to raise up to US$5.8 billion (S$7.3 billion).

Hutchison Port Holdings Trust (HPH Trust), the Chinese ports unit of Hong Kong conglomerate Hutchison Whampoa, launched the public offer of its mega IPO at noon on Monday. Hutchison Whampoa is headed by Asia's richest man Li Ka Shing. HPH owns booming ports in southern mainland China and Hong Kong.

Retail investors here are being offered 185.2 million units out of up to 3.9 billion units on sale in total. Investors have until 10 am next Monday to subscribe.

The final offering price will be set between 91 US cents and US$1.08, with pricing expected next Monday.

In the meantime, Singapore retail investors will have to pay $1.383 per unit - a price converted from the US dollar figure at the top of the range - and will get refunds if the IPO price ends up lower.

The trust is listing here as Hong Kong regulations do not yet allow for such business trusts. Its portfolio boasts ports in Hong Kong and Shenzhen in Guangdong province. Together they were the world's busiest container port market in 2009.

Author:  mkttalk [ March 11th, 2011, 8:57 am ]
Post subject:  Re: Hutchinson IPO

Hutchison Port Holdings Trust has set the price for its Singapore initial public offer at US$1.01 per unit in a listing that could raise up to US$6.1 billion, a person familiar with the transaction said Friday. The group had set an indicative pricing range of US$0.91 to US$1.08 per unit in its prospectus filed to the MAS last week. The company is expected to announce the final pricing Monday. Hutchison Port Holdings said last week it will sell up to 3.9 billion units to institutional investors and the public. The listing will take place March 18. DBS Bank Ltd., Deutsche Bank AG and Goldman Sachs (Singapore) Pte. are the joint bookrunners and joint issue managers for the global offering of Hutchison Port Holdings Trust.

Author:  mkttalk [ March 15th, 2011, 9:02 pm ]
Post subject:  Re: Hutchinson IPO


http://info.sgx.com/webcoranncatth.nsf/ ... penelement

Author:  mkttalk [ March 15th, 2011, 10:26 pm ]
Post subject:  Re: Hutchinson IPO


http://info.sgx.com/webcoranncatth.nsf/ ... penelement

Author:  slt [ September 6th, 2011, 5:58 am ]
Post subject:  Re: Hutchinson IPO

Hock Lock Siew
Published September 6, 2011

Have a little faith in HPH Trust

THE thing about businesses that bill themselves as cash cows is that cows are plodding creatures. In good times, this was not a problem for Hutchison Port Holdings (HPH) Trust.

HPH Trust is a relatively superior dividend play and when trade turns around, potentially a capital gains one as well. The main worry is how much a depreciation in the US dollar would erode the gain in dividend.

All it had to do then was be the yawning maw at the gateways of Hong Kong and China, sucking in port fees from the deluge of cargo passing through its jaws. But times are lean now, and in lean times, global trade is part of the fat that falls away first. Since HPH Trust was listed in March this year, the business trust has fallen about 36 per cent from its listing price, closing at 65 cents yesterday.

It would be tempting to offer, 'It's the economy, stupid' as an explanation, but China Merchants Holdings and Cosco Pacific - two of HPH Trust's competitors - lost only 30 per cent and 29 per cent of their value in the same period.

While a significant part of the selldown had been industry-related, investors are - for reasons that are not entirely clear - taking a more narrow view of HPH Trust, relative to its competing port operators.

To be sure, there are some causes for concern that have been well-visited over the past few months. The ports in the trust's portfolio have seen the direct impact of slowing global trade, with revenue falling about 2.6 per cent short of the forecast figure for the period ended June 30, 2011 - even as it grew year on year.

The distribution that is denominated in Hong Kong dollars remained a bugbear, as the US dollar - to which the HK dollar is pegged - continued on its merry way southwards.

Even so, HPH Trust's unit price has come down, making another bugbear more of an advantage - its distribution yield. When it was first listed, the yield was knocking about in the 5-6 per cent range.

It was consequently sniffed at, since real estate investment trusts offered comparable - and even higher - rates. Shipping trusts, as well, offered rates in the region of about 12-13 per cent.

Now, however, at 65 cents, the trust's yield - estimated at about 5.9 US cents for a full year - is about 9.1 per cent. This far outstrips the average yield offered by Reits in the 5-7 per cent neighbourhood. You could compare it to the shipping trusts that offer two-digit yield percentages, but analysts will wearily tell you that the comparison is unfair.

Shipping trusts have ships that are depreciating assets, while ports sit on land that appreciate over time if no one does anything silly.

The higher yield that investors get from shipping trusts is also something of a stress premium, given the myriad uncertainties that exist in the form of refinancing and counterparty risks.

There is the question, however, of whether HPH Trust will keep up its promise of paying out 100 per cent of distributable income or if distributable income will shrink, especially if trade worsens.

In pricing in this eventuality, however, the market appears to have crossed the line by so much that the line is now a dot, according to some analysts' estimates.

Volume, while not expected to grow at the 7-8 per cent clip previously expected, will probably still grow at a lower rate.

'Current valuations seem to be implying negative trade growth and negative Ebitda growth of almost 20 per cent in FY2012, which we don't think is a realistic possibility even if the world goes into similar levels of recession as in 2008-09,' said DBS Group Research analysts Suvro Sarkar and Paul Yong in a report last month, when the stock hit 67.5 US cents.

They have a 'buy' rating on the stock with a target price of US$1.05.

HPH Trust does look rather dear, relative to its rivals - Hong Kong-listed Cosco Pacific and China Merchants Holdings. While HPH Trust trades at a price-to-earnings (PE) ratio of the high teens, Cosco Pacific and China Merchants have PE ratios in the high single-digits.

This disparity in PE ratios, however, is balanced out by the edge that HPH Trust holds in terms of dividend yield - 9.1 per cent at its current price, compared to 4.55 per cent and 4.5 per cent for China Merchants and Cosco Pacific, respectively.

At this price, HPH Trust is a relatively superior dividend play and when trade turns around, potentially a capital gains one as well.

The call that the investor will have to make, however, is how much a depreciation in the US dollar would erode the gain in dividend. By the time the greenback loses enough value to eat through a dividend yield of 9 per cent, perhaps an investment in HPH Trust will be the least of one's worries.

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