CTT: Too many disappointments
Following CTT’s very poor 3Q17 results and the cut in guidance for FY17E of 20% at the EBITDA level and 21% in the dividend, we no longer feel comfortable with the story and downgrade from Buy to Neutral, cutting our FV from Eur 6.5/sh to Eur3.9/sh. 3Q figures are too negative with revenues down by 1% YoY while recurrent opex grew by 8%. This suggests to us a company struggling on the revenue line and unable to fully contain its costs. New EBITDA guidance implies costs in 4Q17E will keep growing by a mid-single digit, while revenues will be flat or only slightly up. The potential cost cutting plan to be announced before YE could be a positive trigger but we will have to wait and see how much goodwill investors have left.CTT Correios de Portugas, S.A. operates through the following companies: CTT Expresso, Postal services and Logistics, which specializes in courier services, urgent mail and merchandise; Mailtec, which addresses the needs of management of written communication between suppliers and customers ensuring the production of physical and hybrid mail and the electronic management of documents; Payshop, which enables the payment of several services and utilities through a national network of more than 4,000 agents; PostContacto Advertising Mail, which provides services related to the distribution of advertising mail; and Tourline Express, which focuses on courier service and urgent mail transport.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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