Port Holdings Bhd’s (Bintulu Port) first nine months of 2016 (9M16) net profit
was well within the research arm of Kenanga Investment Bank Bhd (Kenanga
As per the group’s
latest financial statement on Bursa Malaysia, for the cumulative quarter ending
September 30, 2016, Bintulu Port’s net profit for the period amounted to
RM106.68 million, up from RM85.53 million in the preceding year corresponding
Kenanga Research, Bintulu Port’s 9M16 net profit came in well within its and
consensus expectations at 77 per cent and 75 per cent, respectively.
A third single-tier
interim dividend of six sen was declared, bringing 9M16 dividend per share
(DPS) to 18 sen which was in line with the research arm’s financial year 2016
estimate (FY16E) of 24 sen (3.8 per cent yield).
noted that going forward, the handling of liquefied natural gas (LNG) vessel
calls and cargoes is still expected to be the largest revenue contributor for
the group, backed by palm oil, container, bulk fertiliser and alumina cargoes.
“Phase 1 of
Samalaju Port is expected to be completed by 2Q17, but throughput contribution
is not expected to be significant in the near term,” the research arm said.
longer-term prospect hinges on Samalaju as it will potentially stimulate the
economic activities in Sarawak on the back of the Sarawak Corridor of Renewable
Energy (SCORE) initiative.”
As such, the research
arm made no changes to its FY16-17E earnings of RM138.2 million to RM145
All in, Kenanga
Research maintained ‘market perform’ but lower target price to RM6.72 per share
from RM7.22 per share previously.
dividend discount model (DDM)-derived target price was lowered after adjusting
for a higher 10-year Malaysian Government Securities (MGS) of four per cent
(from 3.6 per cent) closer to current levels post the MGS spike last week, and
was based on a discount rate of five per cent.
The research arm’s
target price implied a 22.4-fold price earnings ratio (PER) FY16E earnings,
which was on par with Westports Holdings Bhd’s FY16E price earnings ratio (PER)
of 22.9-fold, while the stock is also lacking strong near-term catalyst at this
On a side note,
further downside risks to the research arm’s call included worse-than-expected
LNG demand and delay in construction works of Samalaju Port.
Source: Borneo Post