CWT

CWT: Announced strong 2Q11 results which was in line,
Rev at $229.9m, +25.8% yoy and +21.7% qoq, while core net profit at $10.4m, +52.2% yoy and +7.8% qoq.

Rev rose on back of higher contributions from coal trading, commodity logistics and warehousing operations, which was partially offset by a weaker freight-forwarding topline due to lower freight rates. However, freight forwarding vol were firm despite a tough macroeconomic environment.
CWT was able to benefit from lower trade volumes, which had increased demand for less than- container loads. Lower margins yoy; expected to decline in 2H11, with gross margins dipping 0.9% pt yoy to 12.2%, on the back of increased contributions from lower-margin coal trading, while core operating margins dipped 1.1% yoy to 3.8%, net margins improved 0.8%.
Grp has guidance for a stronger 2H11, as 2H should be stronger seasonally based on higher trade volumes in the mths prior to the Christmas season. In addition, CWT has received its temporary occupation permit for CWT Hub 3, which should commence contributions in 3Q11. MRI also started contributing in Jul. CIMB maintains O/p with $1.74 TP.