In a research note to clients, the stockbroker said the optimistic outlook follows the Philippine Ports Authority's approval of cargo tariff hikes at the Manila International Container Terminal (MICT) and Manila South Harbor.
These increases will be implemented in two phases: a 10% hike on August 5, 2024, followed by an additional 6% six months later.
The tariff hikes are expected to enhance ICTSI's revenue despite recent stagnation in cargo volumes.
According to AP Securities senior research analyst Ferdinand Subido, the first phase of the tariff increase alone could boost MICT's cargo handling revenues by 5%, even if cargo volumes decline as they did in the third quarter of 2023.
If volumes remain flat, as seen in the first quarter of 2024, revenues could surge by 10.1%.
This growth in revenue is expected to compensate for the weaker cargo throughput, supporting ICTSI's overall financial performance, Subido explained.
Given these developments and the current market price correction, AP Securities has set a target price of P372.66 for ICTSI, reinforcing its buy recommendation as a lucrative investment opportunity in the current market landscape.
Financial market recommendations and comments on InsiderPH News belong solely to the analysts and institutions making them. They do not represent buy, sell or hold recommendations of InsiderPH News. Investments held by analysts or institutions may influence their recommendations. Investors should conduct their own research and carefully evaluate all relevant market information before making investment decisions. As always, the past performance of any investment does not guarantee its price appreciation in the future.
