{"id":324146,"date":"2023-07-20T11:06:52","date_gmt":"2023-07-20T03:06:52","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324146"},"modified":"2023-07-20T11:06:54","modified_gmt":"2023-07-20T03:06:54","slug":"stock-in-focus-international-container-terminal-services-inc-ict-20-july-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-international-container-terminal-services-inc-ict-20-july-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: International Container Terminal Services Inc. (ICT) – 20 July 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>ICT<\/td><\/tr>
Company Name<\/strong><\/td>International Container Terminal Services Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>20 July 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 257.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We maintain our BUY rating on ICT with Target Price of P257.00 per share. <\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Capitalizing on distressed assets<\/strong><\/p>\n\n\n\n

Razon-owned port operator ICTSI recently disclosed that the company has been selected as the preferred bidder to help develop and operate the Durban Container Terminal Pier 2 in South Africa. Additional details were disclosed under a Bloomberg news article penned by Antony Sguazzin, which states that both ICTSI and state owned logistics firm Transnet SOC Ltd. would be forming a new company for purposes of managing the port with Transnet owning a slightly larger equity stake of 50% + 1 share. The terminal plays an important role in South Africa\u2019s maritime trade, accounting for 46% of the country\u2019s total port traffic, although recently the Port of Durban has fallen on hard times as evidenced by its low ranking in the World Bank index for container performance (364th out of 370).<\/p>\n\n\n\n

Long term strategic investment<\/strong><\/p>\n\n\n\n

We expect this play on ICT\u2019s part to be more of a long-term move, as admittedly the rehabilitation of the terminal would likely result in higher expenditures, which may even result in net losses flowing into ICT\u2019s financials via the \u201cIncome from Associates & JV\u201d line. We note however, that despite the decline in overall container terminal operations, the income statement of Transnet SOC Ltd. shows that profits for the segment have continued to remain profitable on a pre-tax level. In our view, this further underpins the potential of the terminal given its key importance in South African logistics. The expertise of ICT along with the institution of better cost structuring and a stronger balance sheet within the new JV company would definitely go a long way towards further elevating profits.<\/p>\n\n\n\n

Additionally, the true value of this move lies in the potential doorway that it opens up for Razon and co. when it comes to further laying the blueprint for expansion in South Africa. Given the loose foreign ownership laws in the country, a strong and reliable showing by the port-operator here could open up the gateway for further equity stakes, and potentially even majority ownership, in more South African assets.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>