{"id":326484,"date":"2024-01-25T13:09:12","date_gmt":"2024-01-25T05:09:12","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326484"},"modified":"2024-01-25T13:09:13","modified_gmt":"2024-01-25T05:09:13","slug":"stock-in-focus-international-container-terminal-services-inc-ict-25-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-international-container-terminal-services-inc-ict-25-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: International Container Terminal Services Inc. (ICT) – 25 Jan 2024 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>25 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 263.52<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our BUY rating on ICT with a Target Price of P263.52. In order to maximize upside, we recommend that clients buy near the P241.50 level.<\/p>\n\n\n\n

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

Solid growth story, ample upside<\/h3>\n\n\n\n

Although ICT has appreciated significantly in the past few weeks, we believe that the stock\u2019s long-term story continues to remain appealing. At 8.24x FY24E EV-to-EBITDA, the company\u2019s multiple lies at a 37.9% discount relative to the mean of its global peers, further highlighting i.) the port operator\u2019s strong capital structure management, and ii.) it\u2019s healthy pipeline of free cash flow generation. ICT is projected to generate free cash flow growth of 10.3% in 2024E, relatively solid compared to its peers with available data in Bloomberg. This should free up funds for further deleveraging of debt and perpetual securities which should be EPS and DPS accretive, while also fueling CAPEX for the company\u2019s growth ambitions. We estimate a total of 1.09-Mn worth of TEU capacity coming online by the end of the year, with the bulk of this (77%) coming from the completion of Berth 08 in Manila International Container Terminal which is ICT\u2019s most significant revenue generator.<\/p>\n\n\n\n

Boost to container yields<\/h3>\n\n\n\n

Speaking of MICT, the Manila-based port along with several other terminals in ICT\u2019s portfolio, should benefit from the recently imposed 32% hike on storage charges for foreign containerized cargos. Based on the memorandum, foreign cargoes that are kept stored beyond the free storage period will be charged with increasingly heavier fees the longer that they overstay their welcome. While this may raise some worries regarding the overall inflation picture, the benefits to ICT nevertheless come in the form of i.) less congestion in ports which should help improve turnover and container volumes, and ii.) additional yields being generated from delinquent cargoes. These should help keep ICT\u2019s yield-per-TEU growing at a healthy clip; note that even though volume growth for 9M 2023 was tepid, it was through the company\u2019s yields and cost management that earnings still managed to perform in-line with expectations. With the World Trade Organization forecasting stronger trade growth of 3.3% in 2024, versus its 2023 forecast of 0.8%, the combination of solid yields, better organic expansion in volumes, as well as additional capacity coming online may spur stronger financial performance for ICT this year.<\/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>