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Cogent Holdings - Better cost management propels full year margins and Net Income

Stock surged 12% today on record profit and generous dividend.


Moderate 5% y-o-y Revenue growth outpaced by 24.1% y-o-y growth in core recurring Net Income.
Final dividend of 2.58 Cents and special dividend of 1.18 Cents declared; 73% payout. (FY13: 1.26 Cents final dividend; 40% payout)
Maintain "Buy" rating, with higher target price of S$0.530. (Previous: S$0.470)

What is the news?
Cogent Holdings Ltd ("Cogent") announced its Full Year FY14 (Y/E Dec) results on 25 February after trading hours. Revenue grew 5% y-o-y to S$118.5 million, while reported Net Income grew 63% y-o-y to S$24.66 million. After adjusting out non-recurring gain of S$5.9 million from disposal of 1 Chia Ping Road property, adjusted Net Income was S$18.8 million, representing 24% y-o-y growth. Special dividend declared came about from the one-off disposal.

What do we think of this
Cost savings from consolidation starting to bear fruit – Core EBIT margin has improved from 16.3% in FY13 to 20.1% in FY14.

Full year effect of consolidation to be seen in FY16e onwards – Consolidation of various operations to Cogent 1. Logistics Hub will occur in stages. We estimate that existing container depot lease to continue until sometime in 2H FY15.

Investment Actions
We like Cogent stock for its superior ROE (high-teens, low twenties) and strong operating cash flow. While we expect higher costs in FY15e due to commencement of depreciation of Cogent 1. Logistics Hub, but significant cost savings to materialise in FY16e onwards as operations are fully consolidated to Cogent 1. Logistics Hub.

Maintain our BUY rating on Cogent with higher target price of S$0.530. (Previous: S$0.470)

Source: Phillip Securities Research - 26 Feb 2015
Thanks for highlighting this company. It does seem to be a well run business. I have not done detailed research yet but will definitely do so.


The Board of Directors (“Board”) of Cogent Holdings Limited (the “Company”) wishes to announce that the Company has established the following new wholly owned subsidiary:
Name: Cogent Container Solutions Pte. Ltd., incorporated in Singapore
Principal activities: Trading, leasing and customisation of containers.
Issued and paid-up share capital: Currently S$2.00 and will be increased to S$1,100,000.00.
The abovementioned investment will be funded through internal resources and is not expected to have any material impact on the earnings per share or net tangible assets of the Cogent Group for the financial year ending 31 December 2015.
None of the Directors or controlling shareholders of the Company has any interest, direct or
indirect, in the abovementioned investment, saved for their shareholdings in the Company.

On behalf of the Board

Tan Min Cheow, Benson
Executive Director and CEO
3 March 2015
Stock price rose to a 6 mth high today of 44.5c. Something brewing?

(27-04-2015, 03:07 PM)Tiggerbee Wrote: [ -> ]Stock price rose to a 6 mth high today of 44.5c. Something brewing?


There are a couple of reasons I think. Although Cogent is relatively small (SGD 200m market cap), which means that the larger fund houses are not able to invest in it and also that free float is pretty small (15% I believe), it's a good, quiet (and boring) stock.

ROE in the high teens, main businesses are synergistic and in a relatively safe industry (logistics), consolidation of its warehouses at a central location results in rental savings, stable dividend (1.26 dps and 1.30 dps in past two years).
For a long time, I had the impression that the bulk of their profits came from Grandstand Mall. I didn't realize there were many warehouses too.

(Not Vested)
Private firm of Cogent chairman said to be buying Ridout site
(26-05-2015, 01:24 PM)Nick Wrote: [ -> ]For a long time, I had the impression that the bulk of their profits came from Grandstand Mall. I didn't realize there were many warehouses too.

(Not Vested)

1Q15 revenues
Transportation management 7.4m
Container depot management 5.2m
Automotive logistics management 6.6m
Warehousing and property management 13m (Grandstand consolidated inside this segment)

From their FY13 report, property is 20% of revenues and 39% of operating profit (higher margins for property compared to lower margin logistics businesses)

Hope this helps!
A major project, and potentially put the company into more debt. The current net gearing already more than 70%. May be the equity path is more viable, if the project materialized...

(not vested)


The board of directors (the “Board” or the “Directors”) of Cogent Holdings Limited
(the “Company”, together with its subsidiaries, the “Group”) wishes to announce that
the Company had on 12 October 2015 signed and accepted the letter of intent dated
6 October 2015 (the “LOI”) issued by the Singapore Economic Development Board
(“EDB”) in respect of the Company’s potential appointment as the developer of the
Jurong Island Chemical Logistics Facility (the “Facility”).
Do they own Grandstand Mall or just managing it ?

(Not Vested)
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