Singapore Stock Market News

CWT Limited - Naphtha to the rescue

StockFanatic
Publish date: Sun, 11 Aug 2013, 11:04 PM
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Topline grew 17% on the back of strong contributions from naphtha to the commodity SCM segment. However, net profit was closer to our expectations due to a margin squeeze. Going ahead, we see earnings growth from naphtha and warehouse additions in FY14-15.

2Q net profit exceeded expectations due to S$2m tax savings; else it would have been in-line. While 1H13 net profit of S$45.1m formed 52% of our full-year estimate (49% of consensus), we deem this slightly above due to seasonality. Our SOP-based target price falls to S$1.79 on lower valuation of CWT's investments. We upgrade CWT from Neutral to Outperform, as warehouse additions in FY14 could catalyse the stock.
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