CWT

CWT: Announced 2Q12 results which were in-line with average estimates. Rev at $1.0b, +354% yoy and -2% qoq, while net profit at $19.3m, +78% yoy and -26.7% qoq. Gross margin of 6% vs 9.3% yoy, largely attributed to the acquisition of MRI Trading. Flat qoq rev was expected on back of increased volatility/fluctuations at its commoditiy tradings business, while bottom-line was also impacted by higer admix expenses. Grp however achieved stronger rev from its Engineering Services, Warehousing and Contract Logistics businesses, where extended engineering solutions, increased warehousing capacity and scaled up contract logistics services played key contributing factors respectively. Overall, grps fundamentals remain strong with net gearing at a comfortable 32.2%. At current price, valuations are undemanding, with grp trading at just 7.2 FY12E P/E. Ratings as follow: Maybank-KE maintains Buy with $1.90 TP.