CWT

CWT: SCB maintains Buy but reduce TP to $1.95 from $2.20. House recently had an update with CWT’s management and believe its supply chain mgt profits will be lower than house earlier expectation due to the narrowing spread. However continue to see deep value in CWT, as house estimate the current market value of CWT’s warehouse assets to be $1.11/share, or 57% of its enterprise value. Excluding the warehouse assets, the underlying business should trade at just 3.6x FY14E EV/EBITDA. The recent direct share purchase by the Chairman and the CEO is a positive signal for the stock. We note that CIMB and Maybank-KE had recently reduced their forecasts for CWT, with Maybank-KE slashing its target price to $1.90 from $2.20 while maintaining its buy call, while CIMB had downgraded the stock to neutral from buy and reduced its target price to $1.81 from $1.96.