KUALA LUMPUR (May 11): RHB Research has downgraded CENTURY LOGISTICS HOLDINGS BHD [] to Underperform and slashed its fair value to RM1.63 (from RM2.09) and said the company’s 1QFY12 net profit came in below expectations.
“We believe this was mainly due to: (1) start-up losses from the operation of its double hull product tanker; (2) Lower-than-expected contribution from the ship-to-ship (STS) segment; and (3) The ongoing strike by container haulage drivers had indirectly hampered its total logistics segment,” the research house said in a note Friday.
RHB Research said that Century believes its weak 1Q12 earnings was the trough and management was optimistic of better earnings ahead as: (1) Oil transport business to turn profit (from losses currently) in the coming quarters as it increases its frequency; and (2) To reinstate 3-4 additional floating storage units (FSUs) in PTP.
“We have reduced our FY12-14 net profit forecast by 10.5-26.1% respectively after imputing lower contribution from the STS segment.
“Fair value is reduced to RM1.63 based on 8x FY12 FD EPS. Downgrade to Underperform,” it said.
“We believe this was mainly due to: (1) start-up losses from the operation of its double hull product tanker; (2) Lower-than-expected contribution from the ship-to-ship (STS) segment; and (3) The ongoing strike by container haulage drivers had indirectly hampered its total logistics segment,” the research house said in a note Friday.
RHB Research said that Century believes its weak 1Q12 earnings was the trough and management was optimistic of better earnings ahead as: (1) Oil transport business to turn profit (from losses currently) in the coming quarters as it increases its frequency; and (2) To reinstate 3-4 additional floating storage units (FSUs) in PTP.
“We have reduced our FY12-14 net profit forecast by 10.5-26.1% respectively after imputing lower contribution from the STS segment.
“Fair value is reduced to RM1.63 based on 8x FY12 FD EPS. Downgrade to Underperform,” it said.
