June[2] - HPH Trust USD (Buy for Dividend yield > 6%)

COUNTER: HUTCHISON PORT HOLDINGS TRUST

BUSINESS: 

The business trust is affiliated with Hutchison Port Holdings, the global leader in the container port industry by throughput and a subsidiary of CK Hutchison Holdings Limited. It owns interests in world class deep-water container port assets located in two of the world's busiest container port cities by throughput - Kwai Tsing in Hong Kong and Shenzhen in the People's Republic of China ("PRC"):
(A) Hongkong International Terminals (HIT)
(B) COSCO-HIT Terminals (CHT)
(C) Asia Container Terminals (ACT)
(D) Yantian International Container Terminals (YICT) in PRC

HIGHLIGHTS:

(1) 1Q2015 results saw YICT posting 10% increment in throughput year on year. It was mainly driven by US, transshipment and empty cargoes.
(2) Throughput of terminals in Hongkong posted 1% drop year on year. Total throughput from the counter saw 4% increment year on year. 
(3) Excluding one off gain in 1Q2014, 1Q2015 net profit is up 4%. Including the gain, overall earnings fell 49%.
(4) The management is planning to raise its tariff by 4-6% as it ramps up capacity to handle larger mega-vessels. 

REASONS TO BUY:
(1) Management was guiding > HKD 0.33~0.36/shares for FY14 dividend. Assuming the lowest guide of HKD 0.33 for FY15, it would translate into >6.5% of annual dividend yield based on current exchange rate and trading price at USD0.64
(2) Following management plan in rising capital expenditure to upgrade existing infrastructure, core earning is expected to improve afterwards.
(3) Recent downfall in the shares price presents entry opportunity. 4 years trough is ~USD0.62.

ENTRY PRICE:
HPH Trust is listed as dual currency and USD denominated counter is preferred. This is mainly for accumulation as dividend stock in investor's portfolio. Suggested entry is close to USD0.62.