CWT

CWT: (S$1.545) Insights from SGX/Maybank-KE corporate day CWT was featured in SGX/Maybank Kim Eng Corporate Day on 2 Dec ’14, where CWT’s management gave an update on the group’s businesses. The group highlighted that it was looking at high-single-digit growth for its Logistics business in the next two years. This would be mainly powered by more warehouse space, while rental rates should largely be sustained. Commodity trading should continue to fare well and Financial Services segment has been the biggest surprise so far this year. Management is unfazed by Singapore’s slowing economy, believing the country will stay competitive as a regional logistics hub. Management further explained its trading model, opportunities and risks, where it sees a copper-concentrate supply-demand balance and expects stable trading margins. There may even be upside surprises from sudden supply disruptions. Demand for warehouses and logistics services is also expected to remain strong, and lastly, the group sees very limited impact from the current oil-price slump. Overall, Maybank-KE maintains Buy on CWT with a TP of $1.87. CWT is expected to deliver a 14% EPS CAGR over FY14E-16E, led by Logistics, Commodity Marketing and Financial Services. Backed by such growth and valuations of only 6.5x FY15E EPS, the house opines that CWT’s risk/reward trade-off is favourable.