CWT

CWT: Annouced stellar FY11 results which was above expectations. Mgt has also guided for a 2.5c dividend, (2.2% yield) Overall, Kim Eng maintains Buy with $1.68 TP. With contributions from its newly-acquired commodity trading arm MRI kicking in; recurring net profit went beyond the $50m level for the first time, after hovering around the $25-30m level for the past four yrs.

While there was also structural growth in its other businesses, profits were dragged down by business development costs during the yr, as Grp embarked on new business ventures such as coal trading to put its war chest to good use after the CACHE REIT spin-off.

Excluding MRI, 4Q11 operating performance was strong, with warehouse occupancies at an all-time high and contribution from the Pandan Logistics Hub, which was commissioned in 3Q2011. Construction of the $135m warehouse for AIMS REIT was also started, which boosted profitability.

While CWT appears to have plunged itself into a net debt position, $181m, 38% net gearing, it is worth noting that these debts are mostly at the MRI subsidiary level with no recourse to Grp. Going forward, Kim Eng expect a full-year contribution from MRI, as well as the realisation of business] synergies in 2012, to bring profitability even higher. Other catalysts include possible warehouse divestment gains in 2012, and expansion its logistics business presence in EU.