Last 5 years EPS unstable and fluctuated significantly, from lowest point of 22sen to highest point of 34sen, PE ratio at 19, ROE 8.6%, and dividend yield is at 4.08%.
I like port businesses. It's sort of a monopoly one. I like MMC, Suria, Westport, Bintulu. All Malaysia listed companies. In terms of attractive valuations, the one that trade at big discount at the moment I think is MMC and Suria Bhd (all Sabah ports).
Renewal of Bintulu Port’s concession underway. The concession will expire on 31 Dec 2022, with the option to extend for another 30 years to 2052. The extension has been approved in principle, and BiPort as well as Bintulu Port Authority are in the midst of finalising the terms and conditions for the new concession agreement. An interim agreement was signed for 6 months from 1 Jan 2023. We expect the terms to be finalised by the expiry of this interim agreement. We believe that would be a hike in tariffs upon the renewal of the concession. Bintulu Port’s average terminal handling charges are significantly lower than Samalaju Industrial Port (Exhibit 7). Likewise, Bintulu Port’s terminal handling charges for its containers are also lower than peers (Exhibit 8). Recall that Bintulu Port’s general cargo tariffs were last revised 39 years ago in 1983 while container tariffs were raised 23 years ago in 1999.
The 30-years concession period of Bintulu Port Sdn. Bhd. (BPSB) under the Privatisation Agreement ended on 31st December 2022. The Government through Unit Kerjasama Awam Swasta (UKAS) vide letter dated 8 October 2014 had in principle approved the extension of concession for BPSB to operate Bintulu Port for another 30 years (2023 – 2052) subject to terms and conditions to be agreed upon by the parties.
On 24 November 2022, an Interim Agreement was signed between Government of Malaysia, Bintulu Port Authority and BPSB which allows BPSB to continue the operation, management, maintenance and provision of operational facilities and services of the port undertakings within the Demised Property at Bintulu Port on an interim basis and upon the same terms and conditions of the Privatisation Agreement for a period of six (6) months or until the terms and conditions of the new concession is concluded.
The parties are still in the midst of negotiating the terms and conditions of the new concession agreement.
There were no material events subsequent to the end of the reporting period that have not been reflected in the financial statements.
We like BIPORT for: (i) its steady income stream from handling LNG cargoes for Malaysia LNG Sdn Bhd (that typically makes up close to 50% of its total profit), (ii) it could potentially enjoy a step-up in earnings if Bintulu Port is granted a significant hike in its port tariffs, and (iii) the tremendous growth potential of Samalaju Industrial Port backed by rising investment in heavy industries in Samalaju Industrial Park. Maintain OUTPERFORM.
Risks to our call include: (i) inability of Bintulu Port to secure an adequate port tariff hike to offset escalating operating cost, and (ii) a global recession hurting heavy industries in Samalaju Industrial Park.
Bintulu Port concession expired on 31 Dec 2022 with the option to extend for another 30 years until 2052. The extension has been approved in principle, and BiPort and Bintulu Port Authority are in the midst of finalising the terms and conditions for the new concession agreement. An interim agreement was signed on 24 Nov 2022 for 6 months from 1 Jan 2023 onwards. We expect the terms to be finalised – with a potential tariff revision – by 30 Jun 2023. Looking ahead, we have pencilled in a 4% growth in FY23F throughput volume. We are optimistic on BiPort’s outlook due to (i) the strong and resilient demand for LNG as Europe aims to reduce its dependency on Russian gas; (ii) the growth potential of Samalaju Industrial Port, underpinned by the Sarawak Corridor of Renewable Energy; and (iii) stable earnings and dividend yields. Key risks are (i) macroeconomic and geopolitical uncertainties affecting LNG demand; and (ii) port congestions which may depress throughput volume. The stock currently trades at an attractive FY23F PE of 17.9x, below its 5-year peak of over 20x. Source: AmInvest Research - 1 Mar 2023
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
LouiseS
286 posts
Posted by LouiseS > 2019-02-16 16:49 | Report Abuse
Last 5 years EPS unstable and fluctuated significantly, from lowest point of 22sen to highest point of 34sen, PE ratio at 19, ROE 8.6%, and dividend yield is at 4.08%.
https://louisesinvesting.blogspot.com/2019/02/preliminary-screening-of-counters-with.html