Dear readers, Hutchinson Port Holdings Trust (HPH) (SGX:NS8U) was up 4.57% yesterday to US$0.183.
For the week, Hutchinson Port Holdings Trust was already up by 11.5% (price on 28 Feb 2025 was US$0.165). For the year-to-date, HPH Trust was already up by 11.6% (stock price was US$0.164 as of 30 Dec 2024).
On the technical front, the technical charts looks bullish with the 20-Days-Moving-Average looking to branch out and rise above the 50-Days-Moving-Average. The 100-Days and 200-Days Moving Average below are also on an uptrend.
What could have caused this recent bullishness in Hutchinson Port Holdings Trust?
Well, CK Hutchison has agreed to sell its global port assets (excluding those in China) to a BlackRock-led consortium for approximately USD 22.8 billion. After this transaction, CK Hutchison will maintain a 27% stake in HPH Trust and its other port assets in mainland China and Hong Kong, which will contribute only 2% to its total EBITDA.
This deal has sparked speculation about the potential sale of HPH Trust, despite CK Hutchison’s insistence that it is not included in the sale. However, geopolitical concerns may make Chinese port operators more cautious about overseas investments, prompting potential buyers to consider acquisitions.
I believe the recent price rally in Hutchinson Port Holdings Trust is caused by the speculation. I also read that if HPH Trust is ever put up for sale, Chinese state-owned enterprises (SOEs) like China COSCO Shipping and China Merchants Port are likely to be the strongest contenders.
HPH started trading on 18 March 2011 on SGX and the stock price is now down by around 81.9% from its IPO price of US $1.01. Based on SGX data, Hutchinson Port Holdings Trust is currently undervalued at 0.473 Price-to-Book ratio and with an annual dividend yield of 9%.
In the 2024 HPH AGM which I attended, some investors asked about the possible delisting of the trust given its very lacklustre performance during these 14 years of trading on the Singapore stock markets.
If the speculation surrounding the potential sale of HPH Trust comes to fruition, it could provide closure to yet another lacklustre trading performance for a foreign-based IPO on Singapore stock markets.