SINGAPORE (Apr 23): A brewing trade war between China and the US and continued pressure on container handling fees do not seem to be weighing down Hutchison Port Holdings Trust. Since the beginning of this month, the market price of its units has risen 15.2% off their lows. They are still down some 66% from their IPO in 2011. But some analysts think there is more upside to come.

The key reason for the more positive market sentiment towards HPH Trust is rising container throughput volumes at its terminals in Hong Kong and Shenzhen. In 1Q2018, throughput volume at its terminals in Hong Kong’s Kwai Tsing port was up 1% y-o-y, while throughput volume at its terminals in Yantian, Shenzhen was up 8.7% y-o-y. All in, throughput volume across HPH Trust’s terminals was up 5% y-o-y.

Gerry Yim, CEO of HPH Trust’s manager, says trade tensions between China and the US are unlikely to halt this recovery in throughput volumes because the trust’s container terminals handle goods of the “Walmart” variety. “Our major business in South China is garments, furniture and [bulkier] electronics. All these are not the products on the sanction list,” says Yim. “We are supplying Walmart; [US President Donald] Trump is not trying to hit Walmart.”

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