High payout on a mature asset

� � Focus on PRD container ports, leveraging on world’s No. 1 port operator

Hutchison Port Holdings Trust (HPH Trust) is mainly engaged in operating two of

the world’s largest container ports—Hong Kong and Shenzhen. Its major

investments include Hong Kong International Terminal (HIT, 100%), COSCO-HIT

(50%) and Yantian Ports (51.6-56.4%), which together represented a 39% share of

the Pearl River Delta (PRD) container port market in 2010. HPH Trust also has the

support of its sponsor, Hutchison Port Holdings (HPH), the world’s largest

container port operator by throughput.

� � High dividend payout, manager incentive for higher dividends

HPH Trust has committed to pay out 100% of its distributable income as

dividends, and we forecast a payout ratio (from accounting net profit) of

139%/171% in 2011/2012. The high payout ratio is supported by HPH Trust’s

mature container assets and low future capex requirement. In addition, the trustee

manager has an incentive to provide higher dividends, as it will receive a

performance fee if actual dividends are above forecasts.

� � Key risks: global recession, Rmb appreciation and intensifying competition

We believe the key risks are: 1) a slowing global economy, which could affect

China’s exports and container throughput 2) Chinese exporters losing their

competitive edge because of an appreciating renminbi and 3) intensifying

competition from neighbouring ports.

� � Valuation: initiate coverage with a Buy rating and US$1.17 price target

We derive our price target of US$1.17 (COE of 8.1%) from a DCF-based

methodology. Our price target implies 5.8% dividend yield in 2012E.

High payout on a mature asset

� � Focus on PRD container ports, leveraging on world’s No. 1 port operator

Hutchison Port Holdings Trust (HPH Trust) is mainly engaged in operating two of

the world’s largest container ports—Hong Kong and Shenzhen. Its major

investments include Hong Kong International Terminal (HIT, 100%), COSCO-HIT

(50%) and Yantian Ports (51.6-56.4%), which together represented a 39% share of

the Pearl River Delta (PRD) container port market in 2010. HPH Trust also has the

support of its sponsor, Hutchison Port Holdings (HPH), the world’s largest

container port operator by throughput.

� � High dividend payout, manager incentive for higher dividends

HPH Trust has committed to pay out 100% of its distributable income as

dividends, and we forecast a payout ratio (from accounting net profit) of

139%/171% in 2011/2012. The high payout ratio is supported by HPH Trust’s

mature container assets and low future capex requirement. In addition, the trustee

manager has an incentive to provide higher dividends, as it will receive a

performance fee if actual dividends are above forecasts.

� � Key risks: global recession, Rmb appreciation and intensifying competition

We believe the key risks are: 1) a slowing global economy, which could affect

China’s exports and container throughput 2) Chinese exporters losing their

competitive edge because of an appreciating renminbi and 3) intensifying

competition from neighbouring ports.

� � Valuation: initiate coverage with a Buy rating and US$1.17 price target

We derive our price target of US$1.17 (COE of 8.1%) from a DCF-based

methodology. Our price target implies 5.8% dividend yield in 2012E.