NCB Holdings Bhd (29/10/13) (the edge) MIDF sasar Beli~ RM4.50 Maybank Ib kata “time to collect”~ RM4.84 Shares of NCB Holdings Bhd fell as much as 3% in morning trades, after the transport and logistics provider reported a 40% fall for its third quarter (3Q) net profit yesterday. NCB recorded a much lower net profit of RM27.3 million for its third financial quarter to end-September, 2013, as compared to RM45.17 million a year ago. At 11.00 am, shares of NCB fell 6 sen or 1.62% to RM3.64, on trades of 274,000 shares. Earlier, the share fell as low as RM3.60 to become one of the bourse’s top losers. In a note today, MIDF Research said: “We trim down our FY13-14 earnings forecasts by 10.4% and 14.4% respectively, incorporating the factor of weaker than expected container throughput growth and continued losses in the haulage segment.” But the research house upgraded its recommendation to buy from neutral as the share price has retraced significantly to warrant an upgrade, with an unchanged target price (TP) of RM4.50. NCB is now trading at attractive forward PER of 14.5x as compared to its average peers’ PER of 22.0x while offering a decent dividend yield at 4.6%, it noted. MIDF Research said NCB recorded a net gain of RM27.3 million in 3Q13 as compared to previous quarter net loss of RM5.7 million.The group’s 2Q13 performance was significantly dragged down by impairment losses in its haulage segment with a loss of RM42.9 million, it pointed out. “Year-on-year, 3Q12 net profit decreased 39.6%, mainly due to the negative growth in container throughput which was handled by Northport and higher operating losses in its haulage segment,” it said. The research house expects container throughput to recover upon completion of container terminal 4 (CT4) in the coming fourth quarter. MIDF Research said the completion of CT4 will increase the current annual handling capacity from 4.5 million TEUs to 5.5 million TEUs. The new terminal will be specifically utilized to cater the demand of larger container vessels due to its advantages of 17m water depth (vs 15m in other berths) and heightened ship-to-ship (STS) cranes, it added. Therefore, it believes that Northport’s container throughput will pick up in the subsequent quarters, it noted. No impact from P3 alliance: Over the past one week, the market has reacted negatively towards port operators at Port Klang following the announcement of the revised P3 network. The P3 network is essentially a consolidation of shipping operations by the three biggest liners in the world (i.e. Maersk, MSC and CMA CGM), which will see a greater emphasis of Port of Tj Pelepas in Johor and less port calls at Port Klang (effective mid-2014), amongst the transhipment ports at the Straits of Malacca. As NCB does not have any exposure to the P3 business presently, we believe the changes in the service routes would have limited impact on NCB
Posted on: Tue, 29 Oct 2013 05:52:50 +0000
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