CWT

im a little surprise there's no discussion about this strong growing logistic company?

(29-04-2011, 11:59 AM)Zip113 Wrote: im a little surprise there's no discussion about this strong growing logistic company?

Since you have started the thread, why don't you share your views on the Company? Maybe we can start a discussion on the merits of the Company, as well as its weaknesses?

(Not Vested)

ok give me a while

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CWT CWT is a leading provider of integrated logistics solutions for worldwide customers in the commodities, chemical and petrochemical, marine, oil & gas, defence and industrial sectors. CWT designs, engineers and manages unique and effective supply chain solutions leveraging its in-depth domain knowledge, innovative capabilities and global logistics infrastructure. Through its global network, the CWT Group is able to connect customers to 120 ports and over 1,200 destinations seamlessly around the world.

Current PE ratio of CWT is at 4.519 low compare to average PE of logistic/transport industry of 32.26 and 13.82

Full Year (descending order from 2010 DEC to 2007 )

Revenue 747,181 623,929 602,708 534,907 (consistent growth)
Net Earnings 178,967 33,945 73,912 34,786 (consistent earnings)
Long term debt 120,885 58,177 148,424 136,528 (current year long term debt is payable within earnings)
EPS [$] 0.30318 0.05750 0.12521 0.05893 (overall consistent growth in EPS barr 2009)
NAV [$] 0.7240 0.4946 0.4507 0.3471 (increasing net asset value)
Price Earnings Ratio (PER) 4.39 23.13 10.62 22.57 (company is at lowest PE period)
Return On Equity (ROE) [%] 41.875 11.627 27.781 16.976 (is pretty attractive especially for 2010 fy)

Earlier this year, CWT received the first steel billet shipment at one of its 32 LME
licensed warehouses across the world. This has added to its recurring income from
hard commodities. CWT’s appointment as LME’s first warehouse service provider and
recipient of LME’s first batch of steel billets reflect its close relationship with LME, and
offers earnings stability, as LME had stopped conferring new warehousing licences a
few years ago.

Extracted from CIMB securities 28/4/2011:

RATED: outperform

Management is constantly on the prowl for growth. Having
ensconced CWT in the logistics industry, we see near-term catalysts from its coal
trading, commodities logistics, freight forwarding and contract logistics (warehousing)
businesses. In the mid-term, we anticipate meaningful contributions from its
commodities futures brokerage subsidiary. We anticipate further growth drivers from
any successful expansion into Mongolia in the longer term.

what are your views?

Let me see if I can add some spice.

I came across this announcement as the company responded to SGQ query on its annual report.

SGX was asking the company its basis for not complying with Principle 9.1 and 9.2 of the Code of Corporate Governance.

Under the Code, the company should report on the remuneration of directors and at least the top 5 executives of the company. The report should set out the names of the directors and at least the top 5 key executives earning remuneration which falls within bands of
S$250,000. There will be a breakdown in percentage terms of which director’s remuneration earned through fixed salary, variable or performance-related income /bonuses, etc.

I was not amused with the company's response:

Quote: Principle 9.2 of the Code in the annual report (page 43) provided a breakdown on the overall average fixed and variable components paid to key executives including executive director which were 21% and 79% respectively. However, due to matters of sensitivity, we do not disclose the names of the top 5 key executives.

(emphasis not mine)

In fact, I think its unacceptable that they are not disclosing the name on the basis of sensitivity. So is CWT implying there are overpaying their top 5 executives? Why be afraid to name names?? They cannot expect to be protected on the basis of 'sensitivity' and try to sweep this under the carpet.

In fact, I'm surprised SGX did not follow up and force the issue. What the use of having a code if deviation is allowed? If the code is no longer practical, then it should be reviewed.

(I'm vested in CWT)

If we exclude the one-off gains made from the monetizing of properties to Cache REIT, what will its PER be ? CIMB issued a bullish report recently.

It should be noted that CWT's bottomline for FY10 was boosted by the divestment of CWT Cold Hub and Commodity Hub to Cache Logistic Trust. This net them 369 million. After paying off some debts, 2009 dividends and some bonus for the staff, they still have ard 192 million. [Source]

That's why you see a big jump in their net earnings, EPS etc.. which ultimately makes comparison of their PER to their peers a little less meaningful. Without the divestment, their PE does not look that spectacular.

The company also does not have a FCF for the last 5 FY from 2006 to 2010: (46,215) (113,659) (56,349) (22,472) (43,693)
but gross margin has been consistently above 10% for the last 4 FYs: 10.8% 11.1% 13.9% 13.3%

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(29-04-2011, 12:44 PM)Nick Wrote: If we exclude the one-off gains made from the monetizing of properties to Cache REIT, what will its PER be ? CIMB issued a bullish report recently.

My quick calculation:

Gains from cold hub + commodity hub = 147,600,000
Net earnings (minus gains) = 31,367,000
Issued Share capital (31 dec 2010) = 588,814,239
EPS = 5.32c

PER (based on 31 Dec 2010 price $1.00) = 18.8
PER (based on last done price of $1.33) = 25.0

but lonewolf i'm surprise u are still vested on the counter! what's your reason for it? good diversification of business portfolio?

(29-04-2011, 12:38 PM)lonewolf Wrote: In fact, I think its unacceptable that they are not disclosing the name on the basis of sensitivity. So is CWT implying there are overpaying their top 5 executives? Why be afraid to name names?? They cannot expect to be protected on the basis of 'sensitivity' and try to sweep this under the carpet.

I know of someone working as a entry level engineer there. Local NTU graduate with low pay (<2.5K) and poor welfare (7 days annual leave)..

(29-04-2011, 12:38 PM)lonewolf Wrote: In fact, I think its unacceptable that they are not disclosing the name on the basis of sensitivity. So is CWT implying there are overpaying their top 5 executives? Why be afraid to name names?? They cannot expect to be protected on the basis of 'sensitivity' and try to sweep this under the carpet.

In fact, I'm surprised SGX did not follow up and force the issue. What the use of having a code if deviation is allowed? If the code is no longer practical, then it should be reviewed.

(I'm vested in CWT)

I think i can make a reasonable guess as to why. If you look at the top management staff you will notice some 'ang mohs" there. These are heavy weights and can even command a salary as high as the ceo or even more. so for corp peace they don't want to reveal these people's salary vs locals.

(29-04-2011, 01:19 PM)Zip113 Wrote: but lonewolf i'm surprise u are still vested on the counter! what's your reason for it? good diversification of business portfolio?

My reason for holding on is simple. I got in Apr 07 before they did a bonus dividend cum rights issue so my entry level is very good - almost double in share price now. I did think of divesting earlier this year but seeing that its on a good run, decided to hold on a bit longer. I may still divest part of my holdings to reinvest into other counters. My ave dividend yield is a decent 8.7%.

(29-04-2011, 01:40 PM)Jacmar Wrote: I think i can make a reasonable guess as to why. If you look at the top management staff you will notice some 'ang mohs" there. These are heavy weights and can even command a salary as high as the ceo or even more. so for corp peace they don't want to reveal these people's salary vs locals.

Hmm.. good pt. So when they say 'sensitive', maybe they are referring to it as politically sensitive.