HPHT’s dismal February numbers point to deteriorating environment, say analysts

Kwai Tsing terminals posted a two-year low.

Hutchison Port Holdings Trust (HPHT)'s disappointing figures last month are evidence of a crumbling environment, according to a report by OCBC.

In February, Kwai Tsing terminals clocked an 18% YoY fall to 973,000 twenty foot equivalent unit (TEU)—the first time in two years the terminals dropped below 1.6m TEU. Shenzhen throughput volumes also tumbled 13% YoY in February to 1.6m TEU.

Other figures for China also paint a gloomy picture, as February exports and imports dropped 25% and 14% YoY respectively, while both the official and Caixin manufacturing PMI stand below 50.

Moreover, mega-vessel deployment places HPHT in good stead, though risks prevail. In 2016, 53 mega ships are anticipated to enter service, according to Drewry Shipping. While HPHT’s assets look well-positioned to outshine the industry on back of its suitability for mega-vesel deployment, OCBC remains concerned with the ongoing rationalisation of port usage.

Furthermore, Shanghai’s proposal for the liberalisation of cabotage in China could pose a serious threat to Hong Kong’s position as a transshipment hub. The proposal is understood to currently be under review by mainland authorities.