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PR Newswire
17-05-2013, 01:12 PM
CWT 1Q review-
CIMB:
Investment in MRI bears fruit
CWT had a strong 1Q, contributed by sturdy growth in MRI revenues.
The company also announced the acquisition of a new industrial
facility to cater to its expanding logistics business, especially for the oil
& gas and chemicals sector.
1Q13 core net profit (S$27m)
exceeded expectations, forming 27%
of both our estimates and consensus.
Consistent delivery of MRI earnings
has prompted us to raise our target
P/E for the MRI business from 5.4x
to 7x, based on 20% discount to peers.
Our SOP-based target price increases
to S$1.96.
MRI revenue growth
MRI revenues (S$1,256m) showed
healthy yoy growth (+150%) although
it declined qoq. This increase was due
to higher base metal trading volumes
and new product lines introduced in
3Q12. Assuming logistics GP margins
was constant, MRI gross profit was
20% higher yoy and 35% higher qoq.
Bottom line contributions of MRI,
however, looked muted due to higher
administrative expenses, dragging
down overall operating margins and
bringing profits down closer to our
expectations.
New facility acquisition
On April 30, 2013, CWT completed
the purchase of an old industrial
facility at Pandan Avenue for
S$20.5m (according to REALIS), a
prime location for logistics
warehouses. CWT plans to redevelop
the 23,800 square metres of
industrial space into a multi-storey
ramp-up logistics facility to cater to
its expanding logistics operations in
the oil & gas and chemicals segments.
We adjusted FY13-14 numbers to
account for the acquisition and
development cost, and factored in
incremental logistics revenues in
FY15 numbers.
Rosy outlook
Management remained optimistic on
growth in both the MRI and logistics
businesses, especially since there are
significant synergies to be realized -
growth in the MRI business can
generate more logistics business for
CWT since the raw materials will have
to be stored while in transit.
KE:
CWT Ltd
Growth Story Intact
Structural growth story intact. 1Q13 net profit was within expectation
as CWT registered recurring net profit of SGD26.5m for 1Q13. Our
expectation of a 30% profit growth for the full-year remains intact, and
we continue to see a multi-year structural growth story from there.
Reiterate BUY.
Within expectation. 1Q13 recurring net profit was up 7% yoy to
SGD26.5m (reported net profit of SGD27m). Revenue grew 39% yoy on
expansion of commodity trading business, which helped gross profit
grow 12% yoy. The profit growth came despite higher SG&A cost (up
17% yoy), as CWT continues to build out its commodity trading
business. There was also a high base effect in that MRI had strong
profitability in the same quarter last year.
Commodity trading volumes are up. While the company does not
disclose volume in this segment, revenue was up 20% yoy. Given that
commodity prices are lower, the implication is that volume growth was
stronger than that. This is in line with management’s earlier aim to grow
volume significantly in FY13, and we are likely to see operating
leverage kicking in as the year goes on.
Yet another piece of land. CWT Cold Hub 2 which commenced
construction in March 2012 is now 45% complete and likely to achieve
TOP in 1Q14. Toh Guan Road East is now 30% complete and TOP has
been set for end 2013. We expect these two properties to provide good
rental income next year or provide options for divestment gains. The
company also announced that it has purchased an old industrial facility
at Pandan Avenue in April and this will be developed into a ramp-up
warehouse which will be approximately 640,000 sq feet.
Reiterate BUY. Excluding non-recourse debt associated with
commodity trading business, CWT is in a net cash position of
SGD35.9m. We keep our estimates unchanged, and adjust our SOTP
TP to SGD2.20 from SGD2.05 on account of change in financial asset
and cash value. We have not incorporated the possible value of the
Pandan Avenue property, but it will likely add around between
SGD0.15-SGD0.20 to value per share. Reiterate BUY.
CIMB:
Investment in MRI bears fruit
CWT had a strong 1Q, contributed by sturdy growth in MRI revenues.
The company also announced the acquisition of a new industrial
facility to cater to its expanding logistics business, especially for the oil
& gas and chemicals sector.
1Q13 core net profit (S$27m)
exceeded expectations, forming 27%
of both our estimates and consensus.
Consistent delivery of MRI earnings
has prompted us to raise our target
P/E for the MRI business from 5.4x
to 7x, based on 20% discount to peers.
Our SOP-based target price increases
to S$1.96.
MRI revenue growth
MRI revenues (S$1,256m) showed
healthy yoy growth (+150%) although
it declined qoq. This increase was due
to higher base metal trading volumes
and new product lines introduced in
3Q12. Assuming logistics GP margins
was constant, MRI gross profit was
20% higher yoy and 35% higher qoq.
Bottom line contributions of MRI,
however, looked muted due to higher
administrative expenses, dragging
down overall operating margins and
bringing profits down closer to our
expectations.
New facility acquisition
On April 30, 2013, CWT completed
the purchase of an old industrial
facility at Pandan Avenue for
S$20.5m (according to REALIS), a
prime location for logistics
warehouses. CWT plans to redevelop
the 23,800 square metres of
industrial space into a multi-storey
ramp-up logistics facility to cater to
its expanding logistics operations in
the oil & gas and chemicals segments.
We adjusted FY13-14 numbers to
account for the acquisition and
development cost, and factored in
incremental logistics revenues in
FY15 numbers.
Rosy outlook
Management remained optimistic on
growth in both the MRI and logistics
businesses, especially since there are
significant synergies to be realized -
growth in the MRI business can
generate more logistics business for
CWT since the raw materials will have
to be stored while in transit.
KE:
CWT Ltd
Growth Story Intact
Structural growth story intact. 1Q13 net profit was within expectation
as CWT registered recurring net profit of SGD26.5m for 1Q13. Our
expectation of a 30% profit growth for the full-year remains intact, and
we continue to see a multi-year structural growth story from there.
Reiterate BUY.
Within expectation. 1Q13 recurring net profit was up 7% yoy to
SGD26.5m (reported net profit of SGD27m). Revenue grew 39% yoy on
expansion of commodity trading business, which helped gross profit
grow 12% yoy. The profit growth came despite higher SG&A cost (up
17% yoy), as CWT continues to build out its commodity trading
business. There was also a high base effect in that MRI had strong
profitability in the same quarter last year.
Commodity trading volumes are up. While the company does not
disclose volume in this segment, revenue was up 20% yoy. Given that
commodity prices are lower, the implication is that volume growth was
stronger than that. This is in line with management’s earlier aim to grow
volume significantly in FY13, and we are likely to see operating
leverage kicking in as the year goes on.
Yet another piece of land. CWT Cold Hub 2 which commenced
construction in March 2012 is now 45% complete and likely to achieve
TOP in 1Q14. Toh Guan Road East is now 30% complete and TOP has
been set for end 2013. We expect these two properties to provide good
rental income next year or provide options for divestment gains. The
company also announced that it has purchased an old industrial facility
at Pandan Avenue in April and this will be developed into a ramp-up
warehouse which will be approximately 640,000 sq feet.
Reiterate BUY. Excluding non-recourse debt associated with
commodity trading business, CWT is in a net cash position of
SGD35.9m. We keep our estimates unchanged, and adjust our SOTP
TP to SGD2.20 from SGD2.05 on account of change in financial asset
and cash value. We have not incorporated the possible value of the
Pandan Avenue property, but it will likely add around between
SGD0.15-SGD0.20 to value per share. Reiterate BUY.
