Hutchison Port Holdings Trust (SGX: NS8U) is the world’s first publicly-traded container port business trust, listed here in March 2011. Since listing, Hutchison Port Holdings Trust has not done well in terms of share price performance. When compared against the Singapore stock market benchmark, the Straits Times Index (SGX: ^STI), since floating here in Singapore it has plummetted some 75% while the STI has risen around 10% over the same period.
The poor performance can be attributed to its falling distribution per unit (DPU), which has plunged from 37.7 HK cents in 2011 to just 17 HK cents in 2018. This is despite 2011’s DPU just consisting of around nine months of data as the trust was listed only in March that year.
For its 2019 second quarter, DPU continued falling, declining by around 30% from 8.52 HK cents to 6.00 HK cents. This came on the back of quarterly revenue decreasing by 1.4% to HK$2.75 billion and net profit tumbling 19.7% to HK$136.5 million.
At Hutchison Port Holdings Trust’s closing unit price of US$0.20 on Friday, it had a trailing distribution yield of around 9%. Even though the yield is high, investors have to tread cautiously as the trailing DPU may not be sustainable, as has been the case historically.
Source: S&P Global Market Intelligence (Note: The green line denotes the STI’s percentage returns, the blue line denotes Hutchison Port Holdings Trust’s percentage returns, and the orange line represents the trust’s distribution yield).
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.
Motley Fool Singapore 2019