{"id":327838,"date":"2024-05-09T16:41:32","date_gmt":"2024-05-09T08:41:32","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327838"},"modified":"2024-05-09T17:41:40","modified_gmt":"2024-05-09T09:41:40","slug":"stock-in-focus-international-container-terminal-services-inc-ict-9-may-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-international-container-terminal-services-inc-ict-9-may-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: International Container Terminal Services Inc. (ICT) – 9 May 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>9 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 346.87<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given our target price of P346.87, there is no more upside at ICT\u2019s current price levels. Nevertheless, the company\u2019s long-term outlook and positive free cashflows (USD358-Mn) continue to make its shares an attractive prospect. We would therefore advise investors to take advantage of any dips in order to buy.<\/p>\n\n\n\n

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

Recurring earnings solid despite muted volumes<\/h3>\n\n\n\n

The nearly 7-fold sequential increase in earnings was due to (1) the net impact ($18.9-Million) of settlement claims pertaining to ICTSI Oregon and the gain on sale of an Indonesian terminal in 1Q 2024, and (2) various goodwill impairments that were undertaken at the end of last year. Upon setting these one-offs aside, recurring earnings stood at $191.0-Million (+4.9% QoQ \/ +23.2% YoY), broadly in-line with analysts\u2019 expectations at 26.0% of forecasted figures. The company\u2019s performance was carried mainly by exceptional yield-per-TEU levels, though partially offset by a minor dip in volumes.<\/p>\n\n\n\n

Double-digit expansion on yields<\/h3>\n\n\n\n

Total volumes of 3.09-Mn TEUs were mostly flattish compared to the prior year\u2019s 3.10-Mn, as low single-digit increases in the EMEA (+3.6%) and Americas (+2.8%) segments were countered by a 14.4% contraction in Asian TEUs. The latter segment was down as a result of the company\u2019s divestments from various ports in Indonesia and Pakistan, coupled with soft volumes in Manila. Management noted however that if the effects of divestments were to be excluded, then total like-for-like volume growth would be 5.0%. Despite the mildness in the volumes department, revenues still managed to expand by 11.0% to $637.6-Mn on the back of the surge in blended yield-per-TEU which now lay at $201 (+12.3% YoY).<\/p>\n\n\n\n

Outlook and recommendation<\/h3>\n\n\n\n

Moving forward, management expects yield-per-TEU levels to remain sustainable even at the $190 to $200 range. For Q2, the main tailwind to volume growth will likely come in the form of the newly-minted Visayas Int\u2019l Container Terminal in the Port of Iloilo. With regard to volumes in Manila, the company notes that while the volume trajectory in the beginning of Q2 has so far been healthier, it is still too early to tell whether this would signify a reversal of the prior quarter\u2019s trend. Meanwhile for the Port of Durban in South Africa, current legal disputes involving the workers\u2019 unions are still ongoing, although this has not stopped ICT from moving forward with other regulatory requirements.<\/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>