- Yield = 8.58%
- Price-to-book Ratio = 0.465
- Assets per unit = $1.578
- Debt per unit = $0.717 (including current liabilities and perpetual securities)
- Gearing = 45.5%
Hutchison Port Holding Trust recently has a meltdown in their price which pushes up the yield and makes it more attractive for investment. Let's take a look at the statistics first.
With a yield of 8.58%, it is definitely attractive now considering that it is not easy to get such a yield in the REIT market. Moreover, it was trading at around 6% last year which means people are willing to pay for such a premium given a good market. Its price-to-book ratio is 0.465 which means we are buying at less than half the value. Gearing is at 45.5% which is quite high though.
It is a business trust focusing on port business so it is different from real estate which carries more value even when there is no income. However, HPH Trust holds one of the busiest port and probably important port to the Hong Kong economy as well. It is also operating ports in China. Thus, it is highly reliant to the Chinese economy.
With the high yield and low price-to-book ratio it is worth considering now to invest and I am looking very closely to it. Especially when I am also intending to sell one of my holdings.
The distribution of HPH keep dropping and the profit still not turnaround even the global economic rebound. Do you have any concern on this factor?ReplyDelete
My take is that it is already very low. So it is priced-in.Delete
HPHT is not performing and the fundamentals are weak and the industry outlook is bleak. The same PPT package with some word changes is used for the quarterly results presentation. It is running out of ideas and the business is on a downhill path. Higher yield from lower share price is not the right approach to REIT investment.ReplyDelete
No point having high yield with price dropping.ReplyDelete
The trade war is likely to affect the port businesses around the world. May be wiser to leave it for the time beingReplyDelete