Global ports sector heads closer to trough valuations than shipping

9 July 2018, Global – We have launched a series of reports to track whether the global transport stocks’ valuations have bottomed out following their recent correction for your easy reference. In our fifth report, we will focus on the listed ports globally.

The global ports sector is trading at 21.5x P/E currently, a 13% discount to its historical average valuation in the past 5 years.

The global ports’ P/E valuations are still 51% above their historical trough levels. However, the global ports sector is closer to its trough valuation compared to the global shipping sector which is trading at a 95% premium to its trough valuation. The global shipping sector is also trading at a smaller discount of 7% to its 5-year average P/E valuation compared to the global ports sector’s discount of 13%.

Chart: Global Ports Sector – Current P/E Valuations (2018)

Global Ports Sector – Current P/E Valuations (2018)

Chart: Global Ports Sector Current P/E Valuations versus Historical Average and Trough Valuations in Past 5 Years

Global Ports Sector Current P/E Valuations versus Historical Average and Trough Valuations in Past 5 Years

7 listed ports are trading within 30% from their historical trough valuations

Namyong Terminal, Qinhuangdao Port, Bintulu Port, International Container Terminal Services, Gujarat Pipavav Port, DP World and Shanghai International Port Group are already trading less than 30% above their historical trough valuations.

On the other hand, 4 ports are trading at more than three times their historical average valuations. These include CIG Yangtze Ports, MMC Corp, Dalian Port and Taiwan Allied Container Terminal.

Chart: Global Ports Sector: Current P/E Valuations versus Trough Valuations in Past 5 Years

Global Ports Sector: Current P/E Valuations versus Trough Valuations in Past 5 Years

71% of the global ports are already trading below their 5-year historical average valuations following the recent market correction

Among them, International Container Terminal Services, Namyong Terminal, CIG Yangtze Ports, Qinhuangdao Port, Shanghai International Port Groupare trading at the deepest discounts to their 5-year historical average valuations.

Chart: Global Ports Sector: Current P/E Valuations versus 5-Year Average Historical Valuations

Global Ports Sector: Current P/E Valuations versus 5-Year Average Historical Valuations

Note: Stocks with upside of more than 10% based on our fair value are assigned an Outperform rating. Stocks with downside of more than 10% based on our fair value are assigned an Underperform rating. Stocks with upside or downside of less than 10% based on our fair value are assigned an In-line rating. These are Crucial Perspective’s proprietary rating classifications and by no means serve as investment recommendations.

Independent Research Declaration: Crucial Perspective does not own any position in the equities featured in this report nor have we received any compensation for writing this report. 

 

Related Reports:

Have global airline valuations bottomed yet?

 

Global shipping stocks to correct further if trade weakens

 

Global Aerospace stocks prove more defensive in recent market correction

 

Global Airports valuations at discount to Aerospace but premium to Airline stocks

 

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