The shares of International Container Terminal Services Inc. (ICTSI) is emerging as the best performer at the Philippine Stock Exchange (PSE) this year.
This, as ICTSI shares increased by almost 100% over a 12-month period, or from P210 per share on October 19, 2023 to P409 per share on October 18, 2024. This translates to an increase of 94.8% over a 12-month period for ICTSI shares.
ICTSI operates the Manila International Container Terminal (MICT) and a number of local and international ports.
In March this year, Maybank Investment Banking Group (IBG) in a research note projected ICTSI shares reaching P280 per share in the next 12 months.
And in a second reasearch note by Maybank IBG on ICTSI issued on October 11 projected the price of the company’s shares reaching P432 per share in the next 12 months.
VERY PROFITABLE
ICTSI remains a profitable company and operates a vast network container ports locally and globally.
In August, ICTSI reported that its consolidated revenues for the first quarter of this year reached $1.32 billion, for an increase of 13% from the $1.16 billion reported for the first six months of 2023.
Furthermore, ICTSI’s reported a net income attributable to equity holders of $420.55 million, 34% more than the $313.80 million earned in the first half of 2023 “primarily due to higher operating income, partially tapered by increase in interest on loans and lease liabilities related to concession renewal,” according to the company.
Maybank IBG said that ICTSI is able to sustain its profitability because it has diversified its port operations across 19 countries, making the company less vulnerable to geopolitical conflicts.
“Port operations are significantly influenced by the specific economic conditions of the countries where it operates with geopolitical issues both outside and within the country playing a role. This is mitigated by the diversification of ICT’s ports across 19 countries,” Maybank IBG said.
ICTSI is also expanding further its port operations locally and globally, which will ensure the company’s long-term profitability.
“We expect port expansions based on ICT’s current pipeline. 2025 may see an increase of 670k TEUs (twenty-foot equivalent units) coming from Australia, Manila, Brazil, and Indonesia. In 2026, we expect an expansion of 620,000 TEUs coming from Mexico, Nigeria, and Australia. In 2028, we may see an expansion of 2.4 million m TEUs mainly from the new Batangas port as well as from the Madagascar expansion. For ICT to rerate further would be the addition of Durban port. We forecast that Durban could expand ICT’s total port capacity by 9%,” Maybank IBG said.
“Based on our scenario analysis, the addition of Durban could increase our fair value to P479 [per share],” it added.
Concluding, ICTSI is poised for long-term profitability, which can be good news for stock market investors seeking blue chips as a long-term investment.
(PHOTO FROM ICTSI WEBSITE)
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