Analysts Predict Hutchison Whampoa Expansion Will Offer Long Term Benefits

Tuesday, May 29, 2001
Hutchison Whampoa Ltd's deal to expand its container port network to six new countries will not bring big near term gains in revenue and net asset value, but analysts said it offers good long-term growth potential.

Hutchison said on Monday it had acquired the overseas ports arm of the Philippines' International Container Terminal Services Inc., bringing 23 container and general cargo berths in Mexico, Argentina, Saudi Arabia, Pakistan, Tanzania and Thailand.

The Hong Kong conglomerate, controlled by tycoon Li Ka-shing, has declined to disclose the price, but analyst estimates on the size of the deal ranged from US$240 million to US$542 million. Most estimates were based on the 1999 sale of a 29 percent stake in ICTSI International Holdings Inc (IIHI) for US$70 million to J.P. Morgan International Capital Corp and Capital International Global Emerging Markets Private Equity Fund.

This implied a then-valuation of US$241 million for IIHI, and analysts have been estimating new valuations based on higher throughput and revenues since then. Several said the ports had total container throughput of 1.6 million 20-ft.-equivalent (TEUs) in 2000.

Analysts at Goldman Sachs (who advised Hutchison on the deal) estimated a total equity value of US$300-350 million, or about 17 to 20 times historic 2000 earnings of US$17 million for the seven container ports involved in the deal. "We would view such a valuation as reasonable when compared with our existing net asset value estimate of 20 times forward earnings for Hutchison's developing port network in China," on equity analyst said.

Goldman Sachs advised Hutchison on the deal. He added that the ports acquired under the deal are at an early stage of development and would not provide any material upside to 2001 and 2002 earnings and net asset valuation estimates but said Hutchison would be able to enhance the value of the ports in the longer term.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

Damen Delivers Floating Pump Station to Hamburg

Hamburg Port Authority (HPA) has taken delivery of the Sauger III, a custom floating pump station by Damen Shipyards Group for supporting dredging operations. Situated

Mothballed Vessels SE Asia Reflect Oil Slump Pain

Around 1,300 offshore support vessels lying idle worldwide. Not everyone in shipping is bemoaning the industry's worst crisis in living memory: a cluster of

Striking Port Workers Protest Greek Port Sales

Greek port workers walked off the job for a sixth day on Tuesday and marched through central Athens to protest the state-sanctioned selloff of the country's two largest ports,

Maritime Security

EU Ships in Libyan Waters Would Undermine Tripoli Govt

The U.N.-backed government in Libya has not invited European ships into its territorial waters to help stop people smuggling because this could harm efforts to

China to "Pressure" U.S. on Maritime Issues

China will "pressure" the United States on maritime issues at talks in Beijing next week because of Chinese concern about an increased U.S. military presence in the disputed South China Sea,

CBP, AMO Unveils New Interceptor Vessel

U.S. Customs and Border Protection (CBP) Air and Marine Operations (AMO) and SAFE Boat International celebrated the unveiling of AMO’s newest coastal interceptor vessel (CIV) Thursday.

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0780 sec (13 req/sec)