Hutchison Port Holdings Trust | Buy Target price: US$0.37 July 17 close: US$0.28 OCBC Investment Research, July 17

As at July 16's close of US$0.28, Hutchison Port Holdings Trust (HPHT) has dived 30 per cent year-to-date relative to the Straits Times Index's -3 per cent and is down 42 per cent from its 2017 high of US$0.485. We continue to expect significant volatility as HPHT remains a proxy to the wax and wane of trade tensions, but believe fears have been overblown and see significant value in the counter as at July 16's close.

Recall that HPHT's Q2 FY17 throughput numbers were boosted by temporary phase-in and phase-out activity following the formation of two alliances. Compared to 2016 numbers however, April and May 2018 figures are up 2.7 per cent and 4 per cent respectively. We expect unit prices to remain soft immediately following the second-quarter results release next Monday (after market close) and encourage investors to collect units then.