ICT. Hapag-Lloyd Pauses Philippine Bookings as Shares Slide

Highlights

• Hapag-Lloyd has suspended Philippine bookings because of port congestion, which puts ICT's home-market throughput in question.
• ICT shares are down 13% over the past month to ₱859 amid net foreign selling.
• Vini Research Desk rates ICT a Buy, ~31% upside to our ₱1126.50 fair value.

The Setup

Since our Oct. 3 note, Hapag-Lloyd has suspended bookings into the Philippines because of port congestion, which affects cargo flow through ICT's home terminals, anchored by Manila International Container Terminal. The stock closed at ₱859 on Oct. 9 on 1.55 million shares, down 13% over the month as foreign investors sold on net. Our momentum read on ICT is Bullish.

Source: PSE disclosure

Our Read

This is a capacity problem, not a demand problem. A carrier pulling bookings because Manila's yards are full means cargo is arriving faster than the system can clear it. That is a fixable bottleneck, not a loss of customers. ICT has also kept buying back its own shares into the weakness, which supports per-share value while the selling plays out.

Vini Research Desk rates ICT a Buy, seeing about 31% upside to our fair value of ₱1126.50. Once Manila congestion clears, the pullback leaves room for capital appreciation and continued dividend growth, which benefits holders of the Passive Income Plan and Smart Momentum Quant Plan.

What We're Watching

• Whether other carriers follow Hapag-Lloyd
• Manila throughput in ICT's third-quarter results
• Port authority steps to clear yard congestion