seems too oversold, page-34

One brokers comments on HDF

"We believe that given the events of the past few weeks, HDF’s share price will now trade at a discount to its fair valuation given uncertainty around management forecasts.

Let us put this into perspective; the 2009 distribution was partly cut by management given its ridiculous yield,
however, post today’s fall, HDF is now yielding +20%. Can it be ruled out that this won’t be cut again?

Downside – the downside risk for HDF is that it is unable to sell its stake in SEW in the near future. There are two sides to this. 1. if HDF can’t achieve a sale before June 2010 then they will not have the proceeds to buy out the TAPS (A$110m) which will result in c200m units having to
be issued or 2. come the end of 2008, if HDF are of the opinion that a sale may not proceed or that the proceeds will not be adequate, they may have to look at cutting the distribution to zero."

With target price reduced to 55c