THE BUZZ
The Edge weekly reported that Century Logistics has successfully secured a contract with
F&N Dairies SB to provide all transport logistics for the latter’s inbound movement of finished
dairy products. The 3-year contract will kick start sometime in June-July next year.
OUR TAKE
Going big on MNCs. This marks Century’s second largest MNC client after Nestle, from
which it secured a contract 3-4 years ago. With this big client coming on board, we are
hopeful of Century securing more sizeable long term contracts. This contract’s contribution to
revenue is estimated at RM20m-RM30m a year, especially for Century’s warehousing and
land transportation segment, and fetch a net margin of 5%.
Likely to be a regional contract. Being a regional based customer, Management does not
rule out the possibility of this contract becoming a regional one since Century also has a
warehouse in Ayutthaya, Thailand.
Maintain BUY. Management is targeting for the group’s revenue to grow by more than 20%
y-o-y, which is slightly above our forecast of 15%. However, as we prefer to be conservative,
we maintain our earnings estimates and BUY call, with an unchanged TP of RM2.24 based
on a PE multiple of 6x. Maintain BUY.