JKSB Quarterly Highlights_Expolanka Holdings PLC (EXPO)_1QFY18
Expolanka Holdings PLC (EXPO) reported PAT of Rs.253.0mn (-7.1% YoY) for 1QFY18, however the group recorded quarterly earnings of Rs.204.0mn (+11.9% YoY) on the back of reduced contributions to minority stakeholders (in the previous quarter 4QFY17, EXPO divested their destination management business which had been negatively impacting the group’s bottom line). EXPO’s quarterly performance was weakened by margin contraction (gross margin -1.8 ppts YoY to 17.2% and operating margin -0.3 ppts YoY to 2.4%) which offset a moderate increase in top line (+6.1% YoY).
We revise our earnings expectation to reflect a flat growth of Rs.961.1mn (+0.7% YoY). The counter currently trades at a FY2018E P/E of 12.8x and a P/BV of 1.0x (based on last reported book value) at a market price of Rs.6.30. Margin dilution will continue to pose a challenge to the freight forwarding industry however, volume growth combined with new client acquisitions should allow EXPO to offset such an impact.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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