CWT’s FY13 revenue jumped 69% to S$9.1b, beating ours’ and street’s estimates by 18.0% and 34.6% respectively. However, PATMI decreased by 2% to S$106.0m due to exceptional S$22.5m gain from sale and leaseback (SLB) of a logistics property recorded in FY12. Nevertheless, FY13 PATMI exceeded ours’ and street’s estimates by 33.7% and 25.4% respectively. If we exclude the SLB, we estimate PATMI to have increased by 24.7% instead. While the surge in revenue was largely contributed by Commodity SCM business, the increase in gross profit was generated by Warehousing & Logistics services, Financial Services and Commodity SCM business. A final dividend of 3.5 S-cents is proposed, which implies a 2.7% yield based on yesterday’s closing price. We put our Buy and fair value estimate of S$1.68 under review pending a transfer of coverage.

Source: OCBC Research - 27 Feb 2014