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Tuesday, 9 May 2017

Cogent Holdings (KJ9)

11/5/2017
buy - ld 0.785, tp 1.08, upside 37%
  1. strong growth with reasonable valuation pe 11.9
  2. strong business - properties located in good locations, value chain services
  3. clear growth strategy
metrics
  • market cap S$ 382.8 mm, float 12.93%
  • last done S$ 0.8
  • pe 11.935, pb 3.03, ev/ebitda 8.812
  • dividend yield 2.35, dividend cagr ~70%, consistent
  • revenue cagr ~7.3% consistent, earnings cagr 32% consistent
  • total debt / equity 94.7%, declining past 3 years
  • roe 27.9%, roa 9.07%
  • strong positive cash flow, stable cash in balance sheet
  • shareholders: Yeow Khoon Tan (chairman) 70.27%, Yeow Lam Tan (managing director) 13.58%
operations
  • 4 business segments
    • transportation management services (19% of revenue) - over 100 prime movers and 400 trailers, transport containers
    • warehouse & property management services (40% of revenue) - inventory management, container stuffing and un-stuffing activities, re-packing and palletisation, forklift handling, chemical sampling and drumming services, the grandstand (largest shopping and lifestyle hub in bukit timah)
    • container depot management services (19% of revenue) - container depot and yard operations
    • automotive logistics management services (22% of revenue) - 10 storage facilities and capability of storing more than 3,000 cars at various locations, customs processing
  • Cogent One-Stop Logistics Hub - 1.6 million square feet Gross Floor Area, warehousing, container depot and transportation services, high volume of deliveries can be made simultaneously within minutes, in Singapore’s prime petrochemical hub will give Cogent a strategic advantage to outperform its competitors
growth strategy
  • clear growth strategy
    • Expansion of warehouse & container business in Malaysia - Port Klang Project, expanding the warehouse business with an additional 270,000 square feet of build-up area. The warehouse has commenced operations in March 2017
    • Jurong Island Chemical Logistics Facility project on Jurong Island - 3.5-hectare plot of land, cater to the strong and growing demand for one-stop logistics services within Jurong Island, took over on 13 October 2016
    • recently awarded 5.9-hectare container depot at Tuas South and our patented Sky Depot at the Cogent 1.Logistics Hub, both of which are expected to be fully operational by the 2nd quarter of 2017
risks
  • The financial liabilities of the company are interest-free - little interest rate risk
  • The group’s transactions are largely denominated in Singapore dollars - little fx risk
  • transportation management services revenue declines past 2 years from 30.3mil to 25.9mil - could be due to industry slump or increased competition or increased costs
at
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