FREE Stock in Focus: International Container Terminal Services Inc. (ICT) – 30 April 2025 by AP Securities

NOTE: This is a Premium-exclusive stock report, originally for our Premium Access members, but we’re giving this to you free! To view other FREE stock reports, just click here. To get full access to all Premium-exclusive reports, simply upgrade to Premium Access today for as low as P399.00 a month!

Summary of Broker’s Recommendation

It might seem odd to issue a BUY recommendation on a port operator at the onset of a chaotic trade war that seems bound to rearrange the global movement of goods, but ICT’s portfolio focuses on emerging markets that could get a boost in trade volumes as China seeks other markets. Further, ICT’s forward P/E ratio of 13.7x is now 1.3 standard deviations below its 10-year average P/E of 20.4x and this is the cheapest that ICT has been since the eruption of the Russia-Ukraine war in 2022.

To further underscore the attractiveness of ICT, it retains its title of index company
with the highest cash per share (P31.80/share) relative to its share price and it offers a decent dividend yield of around 4% per annum. With this in mind, we remain a BUY on ICT with a Target Price of P452.00 per share.

Analysis and Opinion

Sell on trade war?

ICT bore the brunt of the selling since Trump tariffed the world, making it one of the worst performing index names and most foreign sold index names on a year-to-date (YTD) basis until it started recouping some of its losses in recent weeks. However, we have reason to believe that the selling might have been overdone and that the effect of the trade war on ICT is mostlyindirect and the company could in fact benefit
from this trade war.

A multipolar world winner

The company came out with a statement last week that less than 3% of cargo coursed through its ports are bound for the US, and that the only terminal they are concerned about is the Contecon Manzanillo terminal in Mexico. The company operates 32 terminals in 19 countries, with one in Mexico, one in China, and none in the US and Canada.

ICT Chairman Enrique Razon said in his statement to shareholders during the annualstockholders’ meeting that he believes China will look to other markets for their industrial output, which could benefit their other ports and would result to minimal impact on the volumes in their Yantai terminal in Northeastern China. We note that ICT maintains a strong presence in Asia and Africa,which are alternative markets for China.

A potential currency loser

On the other hand, the volatility in currency markets and the abrupt weakening of the US dollar could be a net negative for ICT. As of their FY24 report, 38% of ICT’s total revenue is denominated in USD, 19%in PHP, while the balance is in the local currency of territories where they operate. In contrast, 25% of their expenses is denominated in USD, 24% in PHP, while the balance is in local currencies. In effect,this makes ICT a net exporter of services and thus opens them up to negative currency impact from the weaker dollar.

NOTE: This is a Premium-exclusive stock report, originally for our Premium Access members, but we’re giving this to you free! To view other FREE stock reports, just click here. To get full access to all Premium-exclusive reports, simply upgrade to Premium Access today for as low as P399.00 a month!

Check how many brokers recommend this stock

This report is prepared by PinoyInvestor’s partner broker below. Find out more about our partner brokers and sign up to avail their complete trading brokerage services.