Morningstar | Qube Starts the Year Well; No Change to FVE
Based on commentary at its annual general meeting, narrow moat Qube appears to be tracking slightly ahead of original guidance for "solid" net profit growth in fiscal 2019. Volumes are up across most areas, though competitive pressure on margins remains. With intense competition and global uncertainty, we remain comfortable with our prior forecast for EPS to grow 14% in fiscal 2019. We maintain our AUD 2.55 per share fair value estimate and consider Qube fairly valued at current prices.Logistics, ports and bulk should deliver "reasonable growth" in revenue and earnings in fiscal 2019. Logistics is benefiting from the purchase of the MCS empty container storage site leading to improved handling efficiency, and new contract wins. These positives should offset pricing pressure and ongoing poor grain volumes caused by the drought. Ports volumes are solid except motor vehicles given the sharp drop off in new car sales since last year's strong numbers. Bulk appears to be performing well with ramp up of new contracts.
The infrastructure and property division is tracking ahead of management's expectations, but not enough for a change to its full year outlook. Moorebank is generating earnings from rental income on existing properties and fees for managing the project. However, management flagged ongoing challenges with planning processes and government funded work. The rail link will be delayed by up to six months, as previously announced. It wouldn't surprise to see more delays, potentially causing issues for early warehouses relying on the link. However, this isn’t a major concern as the long term value of Moorebank would be unaffected. AAT is suffering from weaker car imports, partly offset by stronger volumes in other cargos and contract wins.
The Patrick container terminals are also trading marginally above management's expectations at the start of the year, with industrywide container volumes growing at a solid rate of 6% in the September quarter.
Patrick is also benefiting from recent contract wins, partly offset by ongoing pressure on pricing.
Qube Holdings is engaged in providing logistics solutions across multiple aspects of the import-export supply chain. Co. is also involved in the management and development of properties. Co.'s segments include: logistics, which provides a range of services relating to the import and export of containerized cargo; ports & bulk division, which provides a range of logistics services relating to the import and export of mainly non-containerized freight, with focus on automotive, bulk and break bulk products; and strategic assets which include, among others, its 66.7% interest in the Moorebank Industrial Property Trust; a 37.5% interest in the Quattro Grain joint venture.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.