Excerpts from analysts' reports
DBS Vickers raises target price of CWT to $2.08
Analyst: Paul Yong
CWT ($1.715 this morning) trades at 8.8X trailing PE. Chart: Bloomberg.
Core logistics business goes from strength to strength. Broad-based revenue growth and higher rate renewals drove top line improvement and better margins in 1Q14, which should continue for the rest of 2014.
Additionally, with CWT Cold Hub’s TOP this quarter and CWT Pandan Logistics Centre’s TOP in 4Q, this additional 1.4m sqft of owned warehouse space will boost the segment’s prospects further.
Loi Pok Yen, CEO of CWT. NextInsight file photoFinancial services gaining traction and momentum. Meanwhile, revenue from Financial Services has grown exponentially from S$8m in 1Q13 and S$9m in 2Q13 to S$34m in 4Q13 and S$48m in 1Q14.
We now project this segment to contribute S$220m (+237% y-o-y) in revenue in 2014F, with a conservative 15% growth estimate in 2015.
Granted a Capital Markets Service License by MAS recently, this should further enhance the segment’s growth in the longer term as well.
Remains undervalued versus peers; BUY. CWT is still trading at attractive valuations of 1.3x FY14 P/B against 16.7% ROE and less than 9x FY14 PE, versus 17x PE for Logistics peers and 15x PE for commodity trading companies. Reiterate BUY.
OSK-DMG raises target price of Nam Cheong to 53 cents
Analyst: Lee Yue Jer, CFA
Nam Cheong has won contracts for two 500-man accommodation work barges (AWBs) worth USD84m, bringing its orderbook to MYR1.5bn.
The AWBs, plus two options, were sold to Perdana Petroleum. These units are build-to-order (BTO), being incremental to Nam Cheong’s shipbuilding programme.
We raise our FY15/16 earnings estimates by 5% each, keep our BUY call and raise TP to SGD0.53 (from SGD0.52).
Recent story: NAM CHEONG buys back shares even as price soars to record high