Hutchison Whampoa Up 1.35%; BofA Merrill Lynch Keeps Buy Call
Hutchison Whampoa (OTC: HUWHY, Hong Kong Stock Code 0013) is up 1.35% to HK$86.65. BofA Merrill Lynch reiterated its “buy” rating and target price of HK$98 on Hutchison Whampoa (00013) expecting solid FY2012 results to be another step towards increasing investor confidence in Hutch’s ability to deliver growth in a difficult economic environment. The house believes valuation remains attractive at a 30% discount to 2013 NAV (versus long-term average of 15%) and stub discount at 50% (versus average of 35%). It sees high-single digit 3-year EPS CAGR ex. H3G, thanks to company-specific growth drivers (energy, China prop, Asian retail), and 12-15% growth if H3G EBIT continues to grow as planned. BofAML raised its FY2012 net profit slightly to HK$23bn, which represents 2% growth on Hutch’s recurring profit definition, but over 10% if unusual gains in 2011 are excluded.