At 45.1%, it has the lowest net gearing among mid-cap firms.
DBS Vickers Securities believes that Hutchison Port Holdings Trust (HPHT) has more room to embark on debt-funded acquisitions to boost its earnings per share (EPS) and distribution per unit (DPU) given its relatively benign gearing level.
The research house notes that among business trusts of at least US$1bn listed in Singapore and Hong Kong, HPH Trust has the lowest net gearing level at 45.1% and also lowest interest costs.
Aside from the acquisition of ACT in 2013, which was partially sold down soon after, and declining to acquire a 50% equity interest in Zhuhai International Container Terminals, DBS notes that all has been quiet on the inorganic front for HPH Trust since 2011.
Hence, given that DPU is a critical factor for share price, it opines that HPH Trust should look out for acquisitions to boost longer-term DPU.
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