KUALA LUMPUR: OSK Research is maintaining its earnings estimates and BUY call on Century Logistics, with an unchanged target price of RM2.24 based on a price-to-earnings (PE) multiple of 6.0 times.
It said The Edge weekly had reported that Century Logistics secured a contract with F&N Dairies Sdn Bhd to provide all transport logistics for the latter's inbound movement of finished dairy products. The three-year contract will kick start sometime in June-July next year.
OSK Research said this marks Century Logistics' second largest MNC client after Nestle, from which it secured a contract three-to-four years ago.
'With this big client coming on board, we are hopeful of Century Logistics'securing more sizeable long term contracts. This contract's contribution to revenue is estimated at RM20m-RM30m a year, especially for Century Logistics' warehousing and land transportation segment, and fetch a net margin of 5%,' it added.
OSK Research said being a regional based customer, management does not rule out the possibility of this contract becoming a regional one since Century Logistics also has a warehouse in Ayutthaya, Thailand.
'Management is targeting for the group's revenue to grow by more than 20% on-year, which is slightly above our forecast of 15%. However, as we prefer to be conservative, we maintain our earnings estimates and BUY call, with an unchanged TP of RM2.24 based on a PE multiple of 6.0 times. Maintain BUY,' it said.
It said The Edge weekly had reported that Century Logistics secured a contract with F&N Dairies Sdn Bhd to provide all transport logistics for the latter's inbound movement of finished dairy products. The three-year contract will kick start sometime in June-July next year.
OSK Research said this marks Century Logistics' second largest MNC client after Nestle, from which it secured a contract three-to-four years ago.
'With this big client coming on board, we are hopeful of Century Logistics'securing more sizeable long term contracts. This contract's contribution to revenue is estimated at RM20m-RM30m a year, especially for Century Logistics' warehousing and land transportation segment, and fetch a net margin of 5%,' it added.
OSK Research said being a regional based customer, management does not rule out the possibility of this contract becoming a regional one since Century Logistics also has a warehouse in Ayutthaya, Thailand.
'Management is targeting for the group's revenue to grow by more than 20% on-year, which is slightly above our forecast of 15%. However, as we prefer to be conservative, we maintain our earnings estimates and BUY call, with an unchanged TP of RM2.24 based on a PE multiple of 6.0 times. Maintain BUY,' it said.
No comments:
Post a Comment