Cosco Pacific Considers Trust After Hutchison Port Listing
Cosco Pacific Ltd. (1199), the terminal arm of China’s biggest shipping group, said it may put some operations in a business trust following Hutchison Port Holdings Trust’s Singapore trading debut earlier this month.
“We are looking at it comprehensively,” Deputy Managing Director Kelvin Wong told reporters today in Hong Kong. “The steady cash flow from our port business has attracted many investment bankers to come and tell us the benefits of port trusts.”
Forming a trust may help boost returns for investors as Cosco Pacific’s dividend yield trails trusts’ payouts, Wong said. HPH Trust, which raised $5.5 billion in its Singapore IPO, offered a projected yield of 5.89 percent, according to people familiar with the situation.
Cosco Pacific, controlled by China Cosco Holdings Co., has no definite plans for a trust, Wong said. He didn’t comment on which assets could be put into one. The company has a projected 12-month dividend yield of 2.3 percent, according to data compiled by Bloomberg.
The company, which also runs the world’s third-largest container-lessor and holds a stake in a box maker, plans capital expenditure of about $1 billion this year, about the same as 2010, said Financial Controller Eddie Lui. The plan includes spending $620 million on port facilities and $380 million on buying new containers, he said.
Cosco Pacific more than doubled 2010 net income to $361.3 million, it said in a statement to the city’s stock exchange today. That was in line with the $358.4 million average of 17 analyst estimates compiled by Bloomberg. It proposed a final dividend of 2.48 U.S. cents.
The terminal operator dropped 2.2 percent to HK$14.54 at the close of trading in Hong Kong. The company has advanced 7.4 percent this year. HPH Trust, the holder of terminals in Hong Kong and southern China, rose 0.5 percent to 97.5 U.S. cents in Singapore, compared with its $1.01 IPO price.
Container volumes across Cosco Pacific’s terminal operations rose 19 percent to 48.5 million 20-foot boxes last year, as world trade rebounded from the global recession. The company has stakes in about 20 cargo-handlers, predominately in China and Hong Kong.
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