We maintain HOLD on Bintulu Port (BiPort), despite 9M24 earnings coming in slightly below expectations at 67% of our estimates as we expect a stronger 4Q24 due to deliveries of deferred cargoes and seasonal demand. We tweak our FY24-25 earnings downwards by 1-4% to account for higher operating costs. We cut our DCF- derived TP to RM6.40/share (vs. RM7.00 previously) to account for the same and a lower terminal growth rate. This implies a CY25 PE of 17.9x at par to its 5-year average which we believe is fair based on our prudent outlook over its growth prospects.

• Maintain HOLD. Changing analyst coverage, we adjust earnings by -1 to -4% for FY24-FY25F to account for higher operating cost assumptions. We revise our DCF-derived TP to RM6.40/share (from RM7.00 previously) as we rollover our forecast period to FY25 and incorporate a lower terminal growth rate assumption of 2.5% (vs. 3% prior) to reflect our prudent view of flattish overall throughput growth. This implies a CY25 PE of 17.9x, or at par to its 5-year average.
• Slightly below expectation. 9MFY24 core net profit (CNP) of RM113mil accounted for 67% of ours and 70% of streets' estimate. The shortfall was mainly due to higher repair and maintenance costs which jumped 29% YoY during the quarter from unplanned maintenance. We expect better earnings in 4Q24 driven by deliveries of deferred cargo and seasonal demand from the winter season. For reference, 4Q typically accounts for 27-37% of annual CNP over the past 8 years.
• Steady LNG-based earnings moving forward. We expect LNG throughput to remain stable in 2025, supported by the supply of feed gas from the commissioning of Jerun and Kasawari gas fields. Note, Petronas has lifted the force majeure on gas supplies to MLNG Dua (capacity 9.6mtpa) effective 1 Nov 24. Recall, gas supplies from MLNG Dua were previously impacted due to leakage in the Sabah-Sarawak Gas Pipeline (SSGP) back in Sept 2022.

Source: AmInvest Research - 25 Nov 2024