HHLA recently published its preliminary 2021 financial highlights. After a temporary blip in 2020 led by the Covid-linked slowdown of global trade, the company’s revenue and operating profit (EBIT) bounced back in 2021, and even surpassed HHLA’s revised 2021 outlook issued on 20 October 2021. The recent fall in the broader equity market due to Russia and Ukraine conflict has increased the upside to 23% (based on our fair value estimate of EUR 22.2) and has automatically changed the rating to At...
On 20 October 2021, HHLA upgraded both of its 2021 revenue and EBIT outlook to EUR 1.5bn or USD 1.7bn (+12% YoY vs -6% in 2020) and EUR 205mn or USD 239mn (vs its previous outlook range of EUR 153-178mn or USD 178-207mn) respectively. The revision was mainly led by the robust increase in storage revenue, which in turn benefited from the ongoing port congestion at HHLA’s terminals in Hamburg. HHLA’s stock trade in undervalued zone with EV/EBITDA of 7.7x (vs Drewry port equity index: 9.3x). We hav...
The container ports and terminals sector is witnessing increased adoption of innovative technologies such as automation and digitalisation. Higher automation reduces labour costs, which in turn lowers operating leverage and can make operating profit more resilient. However, this may lead to strained relations with the trade union. Currently, terminal operators are opting for varying degrees of automation, depending on their financial and technical resources. We are optimistic about the current a...
On 12 August 2021, Hamburger Hafen und Logistik Aktiengesellschaft (HHLA) posted its 1H21 financials results. Consolidated revenue increased by 12.8% to EUR 709.2mn (USD 598.5mn) primarily led by a 13.2% increase in its Port Logistics subgroup (98.0% of the consolidated top line). Higher consolidated revenue translated into a 25.8% increase in EBITDA to EUR 176.2mn (USD 148.7mn) in 1H21, resulting in a 260 bps (YoY) jump in the company’s EBITDA margin of 24.9% in 1H21. From the comparative valua...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
We rate HHLA as ‘Attractive’ with a target price of EUR 18.6 (equivalent to an upside of 18%). The company is largely an undervalued dividend story. HHLA is a leading regional port player in Germany with the majority of shareholding owned by City of Hamburg. Despite this most recent payout being on the lower side of the range, the current dividend yield of 4.2% is substantially above the German 10-year bonds, which are yielding in negative territory. Also, the company is trading in an undervalue...
HHLA posted a low single digit growth in revenue, while its EBIT growth was ahead of revenue growth. While total EBIT grew strongly, growth in Intermodal and container segment EBIT margin kept pace with top-line growth figures. Net profit rose on decline in interest expense, an indicator of prudently managed debt/equity ratio and steady liquidity. HHLA retains its reputation of being undervalued compared with its peers due to its exposure to a mature German market. However low, River Elbe dredg...
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