Company Guide Hutchison Port Holdings Trust

Version 14 | Bloomberg: HPHT SP | Reuters: HPHT.SI Refer to important disclosures at the end of this report

DBS Group Research . Equity 25 Jul 2019

HOLD 2019 DPU forecast cut to 13HKcts Last Traded Price ( 24 Jul 2019): US$0.225 (STI : 3,368.44) Price Target 12-mth: US$0.23 (2% upside) (Prev US$0.26) Maintain HOLD with a lower TP of US$0.23. Despite a decent prospective yield of 7.4% on offer, we remain neutral on Analyst Hutchison Port Holdings Trust (HPHT) as it remains vulnerable to Paul YONG, CFA +65 6682 3712 [email protected] the on-going trade dispute between the US and as its key What’s New port asset in Yantian, Shenzhen is heavily exposed to China’s export sector. Its port asset has also been • 1H19 earnings below expectations as net profit fell underperforming for many years with no clear sign of a 26% y-o-y on higher finance and tax expenses, on turnaround anytime soon. flattish revenue growth

• Interim dividend of 6HKcts with FY19 full year DPU Where we differ: We cut our FY19F and FY20F DPU by 2HKcts guidance now at lower end of 11-17HKcts per year to 13HKcts and 14 HKcts respectively.

• FY19/20F earnings lowered by 12%/10%, FY19F DPU Potential catalysts: HPHT’s share price could re-rate if cut to 13HKcts throughput volumes can drive better-than-expected revenues • Maintain HOLD with a lower TP of US$0.23 and cash flows in the quarters ahead.

FY19F DPU guidance adjusted to lower end of 11-17 HKcts Price Relative range, citing uncertainties posed by the US-China trade situation. Given the lackluster 1H19 results and citing uncertainty over its throughput outlook due to the ongoing US- China trade war situation, the company has now guided for FY19F DPU to be at the lower end of its previous DPU guidance range for FY19 of between 11-17HKcts.

Valuation: Forecasts and Valuation Maintain HOLD, TP cut to US$0.23. Our TP is based on a FY Dec (HK$m) 2017A 2018A 2019F 2020F discounted cash flow valuation framework (weighted average Revenue 11,551 11,483 11,407 11,655 cost of capital of 8.6% and terminal growth rate of 0%). EBITDA 6,565 6,575 6,435 6,557 Pre-tax Profit 2,705 (9,812) 2,254 2,413 Net Profit 944 (11,551) 609 652 Key Risks to Our View: Net Pft (Pre Ex.) 944 738 609 652 A global recession would materially impact trade and Net Pft Gth (Pre-ex) (%) (44.9) (21.9) (17.5) 7.1 throughput numbers for HPHT, which would then have an EPS (US cts.) 1.39 (17.0) 0.89 0.96 EPS Pre Ex. (US cts.) 1.39 1.08 0.89 0.96 impact on the group’s earnings and cash flows, and ultimately EPS Gth Pre Ex (%) (45) (22) (17) 7 dividend payout. Net DPS (US cts.) 2.64 2.18 1.66 1.79 BV Per Share (US cts.) 59.2 39.3 38.6 37.7 At A Glance PE (X) 16.2 nm 25.1 23.5 Issued Capital (m shrs) 8,711 PE Pre Ex. (X) 16.2 20.8 25.1 23.5 Mkt. Cap (US$m/US$m) 1,960 / 1,959 P/Cash Flow (X) 2.7 3.6 3.2 3.0 EV/EBITDA (X) 9.3 9.1 9.1 8.7 Major Shareholders (%) Net Div Yield (%) 11.7 9.7 7.4 8.0 Hutchison Ports 27.6 P/Book Value (X) 0.4 0.6 0.6 0.6 Temasek Holdings Private Ltd 13.9 Net Debt/Equity (X) 0.4 0.5 0.5 0.5 Free Float (%) 58.5 ROAE (%) 2.3 (34.5) 2.3 2.5 3m Avg. Daily Val (US$m) 1.5 Earnings Rev (%): (12) (9) ICB Industry : Industrials / Industrial Transportation Consensus EPS (US cts.): 0.87 0.92 Other Broker Recs: B: 0 S: 3 H: 4 Bloomberg ESG disclosure score (2018)^ 36.0 Source of all data on this page: Company, DBS Bank, Bloomberg - Environmental / Social / Governance 26.4/ 43.9 / 51.8 Finance L.P ^ refer to back page for more information

ed: JS/ sa: AS, PY, CS Company Guide

Hutchison Port Holdings Trust

WHAT’S NEW 1H19 earnings and DPU disappoint

2Q19 net profit slides 20% y-o-y. HPHT reported 2Q19 net for YICT Phase I & II. Following the expiry of its tax status, its profit of HK$137m, a 20% drop y-o-y, slightly below our tax rate increased from 15% to 25% standard tax rate. The expectations. Revenue during the quarter was flat at management believes that HPHT stands a low chance in HK$2.7bn. Throughput volume in HK for the quarter fell by getting the same tax incentive given more stringent 4.4% y-o-y, and this was offset by a 4.9% increase in requirements. Further, the management does not expect any throughput volume in Yantian. ASP was and is expected to rate hikes in the second half and finance costs should remain remain stable. Gross profit was flat at HK$1.8bn for the largely the same. quarter. Cautious DPU guidance. The management shared that DPU 1H19 earnings fell 26% y-o-y to HKS$233m, on revenue for the year will fall at the lower end of its guidance of 11-17 decline of 0.6% to HK$5,424m. HKcts as it continues to remain cautious on the global trade outlook. We have revised our FY19F DPU downwards to 13 Lower net profit mainly due to increased interest expense HKcts from 15 HKcts, while cutting our FY19F earnings by from higher HIBOR/LIBOR, and higher tax costs from the 12.1%. As a result, we cut our TP to US$0.23. expiry of the “High and New Technology Enterprise” status

Quarterly / Interim Income Statement (HK$m) FY Dec 2Q2018 1Q2019 2Q2019 % chg yoy % chg qoq

Revenue 2,789 2,675 2,749 (1.5) 2.7 Cost of Goods Sold (1,006) (948) (953) (5.4) 0.5 Gross Profit 1,783 1,727 1,796 0.7 4.0 Other Oper. (Exp)/Inc (946) (958) (958) 1.2 0.0 Operating Profit 837 769 838 0.2 9.0 Other Non Opg (Exp)/Inc 0.0 0.0 0.0 - - Associates & JV Inc (10.0) (10.1) (15.5) (55.0) 53.5 Net Interest (Exp)/Inc (252) (274) (271) (7.6) 1.2 Exceptional Gain/(Loss) 0.0 0.0 0.0 - - Pre-tax Profit 575 485 552 (4.0) 13.8 Tax (102) (107) (109) 7.1 1.8 Minority Interest (303) (281) (306) (1.1) 9.1 Net Profit 170 96.9 137 (19.7) 40.9 Net profit bef Except. 170 96.9 137 (19.7) 40.9 EBITDA 1,594 1,528 1,599 0.3 4.6 Margins (%) Gross Margins 63.9 64.6 65.3 Opg Profit Margins 30.0 28.8 30.5 Net Profit Margins 6.1 3.6 5.0

Source of all data: Company, DBS Bank

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HIT Throughput ('000 TEUs) CRITICAL DATA POINTS TO WATCH

Critical Factors Volumes under pressure. Throughput volume at Yantian Port grew by 3.6% y-o-y to 13.2m TEUs in 2018, driven mainly by growth in US and transshipment volumes. This followed an 8.6% y-o-y improvement in 2017, which was also led by growth in US volumes and transshipment cargoes. For 2019, we expect volumes at Yantian to stay flat, subject to how the US- China trade war situation plays out. Yantian Throughput ('000 TEUs) Meanwhile, the Trust’s wholly owned subsidiary, Hong Kong International Terminals (HIT), saw volumes contract 6.6% y-o-y in 2018 following a 6% y-o-y decline in 2017. We are projecting throughput growth to be flat in 2019, with an improvement of 2% in 2020.

Container handling rates to remain subdued. The average revenue per TEU for HIT rose by 0.5% y-o-y in 2018, compared to 8.7% y-o-y decline in 2017, due mainly to a write-back of agency fee provision following the finalisation of tariff negotiation. We expect average tariff for HIT to be flat in 2019. HIT Tariff / TEU For Yantian, we assume a similar 1% decline in revenue per TEU in 2019 as in 2018, as the RMB continues to weaken slightly against the US$.

Cost management important to protect margins. On 8 January 2019, HIT, COSCO-HIT, ACT and Modern Terminals Limited entered into a Hong Kong Seaport Joint Operating Alliance Agreement regarding the terms on which they will collaborate with each other for the efficient management and operation of the 23 berths in Kwai Tsing. This should help manage costs for all parties involved. Yantian Tariff / TEU

Rising interest cost a drag on pretax earnings. In a rising interest rate environment, we project higher interest costs for HPHT ahead, which would drag core pre-tax earnings growth in FY19F and 2020F. We project HPHT’s average cost of debt to be 3.5% in FY19 vs 3.25% in FY20.

Higher tax costs due to the expiry of the “High and New Technology Enterprise” status for YICT Phase 1 & II. This led to an increase from 15% tax rate to 25% standard income tax which will continue to put pressure on the company’s net profit Operating Margin (%) margins going forward.

Source: Company, DBS Bank

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Hutchison Port Holdings Trust

Capital Expenditure Balance Sheet: Net gearing to decline following start of debt repayment programme in 2017. HPHT's net gearing stood at 0.93x as at end-FY18, and this should decline as the Trust continues to pay down debt, to 0.86x by end-2020F.

Share Price Drivers: Strong South China export growth. With market shares of c. 70% and c. 60% in Hong Kong and Shenzhen respectively, HPHT would be the prime beneficiary of a potential recovery of ROE (%) South China exports. A sharp rise in manufacturing activity (reflected in future PMI data) could thus lift its share price.

Target price of US$0.23 based on DCF. Our TP is based on a discounted cash flow valuation framework (weighted average cost of capital of 8.6% and terminal growth rate of 0%).

Key Risks: Transshipment volumes can be volatile. About 75% of Hong Kong Port volumes are transshipment cargoes, which are Forward PE Band (x) subject to competition from other regional ports like Singapore, Shanghai, and . Hence, pricing for transshipment cargoes is likely to continuously be under pressure. Furthermore, transshipment volumes are vulnerable to changes in the route planning and strategies of shipping companies and shipping alliances.

Exposed to higher interest rates. If interest rates were to rise at a rapid pace in 2019 and beyond, it would lead to lower-than- expected earnings, cash flows and thus have an impact on PB Band (x) dividends for HPHT. Fixed rate debt accounts for c. 36% of its total debt.

Environment, Social, Governance: HPHT continued to maintain its disclosure standards in 2018, maintaining its Bloomberg ESG Disclosure Score. On performance, HPHT started to emphasize on cybersecurity and no reported incidents on digital security breach was made in 2018. This will help to protect the bottom line and reputation of the trust. Bloomberg ESG Disclosure Score 2015-2018

Company Background Hutchison Port Holdings Trust (HPHT) has controlling interests in container port assets located in two of the world's busiest container port cities by throughput - Kwai Tsing, Hong Kong and Yantian Port, Shenzhen, China.

Source: Company, DBS Bank

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Key Assumptions FY Dec 2016A 2017A 2018A 2019F 2020F

HIT Throughput ('000 8,377 7,876 7,357 7,357 7,504 TEUs) Yantian Throughput ('000 11,697 12,704 13,160 13,160 13,423 TEUs) HIT Tariff / TEU 575 525 528 528 531 Yantian Tariff / TEU 606 584 577 572 572 Operating Margin (%) 35.5 31.2 30.9 29.8 30.2

Segmental Breakdown FY Dec 2016A 2017A 2018A 2019F 2020F

Revenues (HK$m) HK 4,820 4,138 3,884 3,884 3,981 PRC 7,092 7,413 7,599 7,523 7,673 Total 11,912 11,551 11,483 11,407 11,655

Income Statement (HK$m) FY Dec 2016A 2017A 2018A 2019F 2020F

Revenue 11,912 11,551 11,483 11,407 11,655 Cost of Goods Sold (4,251) (4,132) (4,144) (4,144) (4,248) Gross Profit 7,661 7,419 7,339 7,263 7,407 Other Opng (Exp)/Inc (3,437) (3,818) (3,787) (3,844) (3,865) Operating Profit 4,224 3,602 3,552 3,419 3,542 Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0 Associates & JV Inc 76.9 (40.0) (52.6) (63.1) (63.1) Net Interest (Exp)/Inc (701) (857) (1,022) (1,102) (1,066) Exceptional Gain/(Loss) 0.0 0.0 (12,289) 0.0 0.0 Pre-tax Profit 3,600 2,705 (9,812) 2,254 2,413 Tax (646) (487) (434) (463) (495) Minority Interest (1,240) (1,273) (1,305) (1,182) (1,265) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 1,714 944 (11,551) 609 652 Net Profit before Except. 1,714 944 738 609 652 EBITDA 7,218 6,565 6,575 6,435 6,557 Growth Revenue Gth (%) (5.6) (3.0) (0.6) (0.7) 2.2 EBITDA Gth (%) (1.3) (9.0) 0.2 (2.1) 1.9 Opg Profit Gth (%) (3.0) (14.7) (1.4) (3.7) 3.6 Net Profit Gth (Pre-ex) (%) (1.8) (44.9) (21.9) (17.5) 7.1 Margins & Ratio Gross Margins (%) 64.3 64.2 63.9 63.7 63.6 Opg Profit Margin (%) 35.5 31.2 30.9 30.0 30.4 Net Profit Margin (%) 14.4 8.2 (100.6) 5.3 5.6 ROAE (%) 4.1 2.3 (34.5) 2.3 2.5 ROA (%) 1.5 0.8 (11.2) 0.6 0.7 ROCE (%) 3.3 2.8 3.7 3.1 3.3 Div Payout Ratio (%) 155.6 190.1 N/A 186.0 187.1 Net Interest Cover (x) 6.0 4.2 3.5 3.1 3.3 Source: Company, DBS Bank

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Quarterly / Interim Income Statement (HK$m) FY Dec 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Revenue 2,789 3,027 2,999 2,675 2,749 Cost of Goods Sold (1,006) (1,017) (1,128) (948) (953) Gross Profit 1,783 2,010 1,871 1,727 1,796 Other Oper. (Exp)/Inc (946) (957) (972) (958) (958) Operating Profit 837 1,052 900 769 838 Other Non Opg (Exp)/Inc 0.0 0.0 0.0 0.0 0.0 Associates & JV Inc (10.0) (13.6) (3.6) (10.1) (15.5) Net Interest (Exp)/Inc (252) (270) (270) (274) (271) Exceptional Gain/(Loss) 0.0 0.0 (12,289) 0.0 0.0 Pre-tax Profit 575 768 (11,663) 485 552 Tax (102) (128) (118) (107) (109) Minority Interest (303) (401) (326) (281) (306) Net Profit 170 240 (12,106) 96.9 137 Net profit bef Except. 170 240 183 96.9 137 EBITDA 1,594 1,803 1,665 1,528 1,599

Growth Revenue Gth (%) 4.6 8.5 (0.9) (10.8) 2.7 EBITDA Gth (%) 5.3 13.1 (7.6) (8.2) 4.6 Opg Profit Gth (%) 9.7 25.8 (14.5) (14.5) 9.0 Net Profit Gth (Pre-ex) (%) 16.9 40.9 (23.7) (47.0) 40.9 Margins Gross Margins (%) 63.9 66.4 62.4 64.6 65.3 Opg Profit Margins (%) 30.0 34.8 30.0 28.8 30.5 Net Profit Margins (%) 6.1 7.9 (403.6) 3.6 5.0

Balance Sheet (HK$m) FY Dec 2016A 2017A 2018A 2019F 2020F

Net Fixed Assets 67,799 66,321 63,999 61,921 59,842 Invts in Associates & JVs 4,712 4,590 3,629 3,466 3,303 Other LT Assets 29,932 29,574 17,697 17,697 17,697 Cash & ST Invts 7,000 6,768 6,566 6,989 7,633 Inventory 112 110 103 112 115 Debtors 3,818 3,446 3,061 3,367 3,441 Other Current Assets 0.0 0.0 0.0 0.0 0.0 Total Assets 113,373 110,809 95,056 93,552 92,030

ST Debt 4,242 4,241 2,518 2,518 2,518 Creditor 7,648 6,742 5,928 6,153 6,319 Other Current Liab 259 410 358 358 358 LT Debt 29,241 28,249 28,974 27,938 26,902 Other LT Liabilities 11,301 10,846 10,610 10,610 10,610 Shareholder’s Equity 41,249 40,294 26,768 26,244 25,676 Minority Interests 19,433 20,028 19,900 19,732 19,648 Total Cap. & Liab. 113,373 110,809 95,056 93,552 92,030

Non-Cash Wkg. Capital (3,977) (3,595) (3,122) (3,032) (3,122) Net Cash/(Debt) (26,483) (25,722) (24,925) (23,466) (21,786) Debtors Turn (avg days) 115.5 114.8 103.4 102.8 106.6 Creditors Turn (avg days) 2,043.4 2,327.5 2,166.0 2,070.1 1,947.8 Inventory Turn (avg days) 32.2 35.9 36.4 36.8 35.4 Asset Turnover (x) 0.1 0.1 0.1 0.1 0.1 Current Ratio (x) 0.9 0.9 1.1 1.2 1.2 Quick Ratio (x) 0.9 0.9 1.1 1.1 1.2 Net Debt/Equity (X) 0.4 0.4 0.5 0.5 0.5 Net Debt/Equity ex MI (X) 0.6 0.6 0.9 0.9 0.8 Capex to Debt (%) 5.3 2.6 2.3 3.3 3.4 Z-Score (X) 0.0 0.0 0.0 0.0 0.0

Source: Company, DBS Bank

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Cash Flow Statement (HK$m) FY Dec 2016A 2017A 2018A 2019F 2020F

Pre-Tax Profit 3,600 2,705 (9,812) 2,254 2,413 Dep. & Amort. 2,917 3,003 3,076 3,078 3,079 Tax Paid (968) (646) (826) (463) (495) Assoc. & JV Inc/(loss) (76.9) 40.0 52.6 63.1 63.1 Chg in Wkg.Cap. 270 (532) (422) (90.6) 90.1 Other Operating CF (577) 1,170 12,175 0.0 0.0 Net Operating CF 5,164 5,740 4,245 4,842 5,150 Capital Exp.(net) (1,765) (839) (722) (1,000) (1,000) Other Invts.(net) 0.0 21.6 0.0 0.0 0.0 Invts in Assoc. & JV 0.0 (673) 142 0.0 0.0 Div from Assoc & JV 83.0 131 127 100 100 Other Investing CF 56.2 (249) 100 0.0 0.0 Net Investing CF (1,626) (1,609) (353) (900) (900) Div Paid (2,849) (2,274) (1,709) (1,132) (1,220) Chg in Gross Debt 441 (1,039) (1,036) (1,036) (1,036) Capital Issues 0.0 0.0 0.0 0.0 0.0 Other Financing CF (971) (1,050) (1,349) (1,350) (1,350) Net Financing CF (3,379) (4,363) (4,094) (3,519) (3,606) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash 159 (232) (202) 423 644 Opg CFPS (US cts.) 7.19 9.21 6.86 7.25 7.43 Free CFPS (US cts.) 4.99 7.20 5.18 5.64 6.10 Source: Company, DBS Bank

Target Price & Ratings History

Source: DBS Bank Analyst: Paul YONG, CFA

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^ Bloomberg ESG Disclosure Scores rate companies annually based on their disclosure of quantitative and policy-related ESG data. It is based on a scoring scale of 0-100, and calculated using a subset of more than 100 raw data points it collects on ESG. It is designed to measure the robustness of companies' disclosure of ESG information in their reporting/the public domain. Based on Bloomberg disclosures, as of 25 Jan 2019, the global ESG disclosure average score is 24.92 and 22.14, 28.26, 49.97 for Environmental, Social and Governance, respectively.

DBS Bank recommendations are based on an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return, i.e., > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable share price catalysts within this time frame) *Share price appreciation + dividends

Completed Date: 25 Jul 2019 16:48:12 (SGT) Dissemination Date: 25 Jul 2019 17:18:46 (SGT)

Sources for all charts and tables are DBS Bank unless otherwise specified.

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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.

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Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.

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COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS'') or their subsidiaries and/or other affiliates have a proprietary position in Hutchison Port Holdings Trust recommended in this report as of 30 Jun 2019 2. Neither DBS Bank Ltd nor DBS HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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For any query regarding the materials herein, please contact Carol Wu (Reg No. AH8283) at [email protected]

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Malaysia This report is distributed in by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

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Company Guide

Hutchison Port Holdings Trust

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

United This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore. Kingdom This report is disseminated in the by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at units 608 - 610, 6th Floor, International Gate Precinct Building 5, PO Box 506538, DIFC, Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated Financial by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the Centre DFSA rulebook) and no other person may act upon it.

United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as Emirates defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

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Company Guide

Hutchison Port Holdings Trust

DBS Regional Research Offices

HONG KONG MALAYSIA SINGAPORE DBS (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Carol Wu Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 13th Floor One Island East, 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 18 Westlands Road, Capital Square, Marina Bay Financial Centre Tower 3 Quarry Bay, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 852 3668 4181 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 852 2521 1812 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] e-mail: [email protected] Company Regn. No. 196800306E

THAILAND INDONESIA DBS Vickers Securities (Thailand) Co Ltd PT DBS Vickers Sekuritas (Indonesia) Contact: Chanpen Sirithanarattanakul Contact: Maynard Priajaya Arif 989 Siam Piwat Tower Building, DBS Bank Tower 9th, 14th-15th Floor Ciputra World 1, 32/F Rama 1 Road, Pathumwan, Jl. Prof. Dr. Satrio Kav. 3-5 Bangkok Thailand 10330 12940, Indonesia Tel. 66 2 857 7831 Tel: 62 21 3003 4900 Fax: 66 2 658 1269 Fax: 6221 3003 4943 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand

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