ICTSI is poised to ride a wave of global trade resurgence
While risks remain, the global port operator will benefit from a trade growth rebound and shifting supply chain
With trade seen to grow as economies worldwide rebound, global port operator International Container Terminal Services, Inc. (ICTSI) is poised to ride the wave of resurgence.
The company is strategically positioned, particularly in key regions of Asia, North America and Europe.
Mexican connection
Notably, Mexico has emerged a critical market for ICTSI, with its Contecon Manzanillo S.A. de C.V. (CMSA) terminal contributing 20% of the company’s total revenue.
This has been driven by accelerating reshoring and offshoring, fueled by the US-China decoupling. Mexico’s strategic role in the supply chain shift – helped by aggressive government efforts to attract manufacturers – has led to a surge in trade volumes in the third quarter compared to same period last year. Companies like General Motors and Foxconn have already committed significant investment, while interest is fizzing from other firms such as DHL, Stellantis, and Intel.
Global reach
Beyond Mexico, ICTSI’s diversified global portfolio can capitalize on favorable economic trends and industry shifts, presenting a significant tailwind for the company.
The sharp rise in the Baltic Exchange Dry Index—which measures global shipping rates—signals a potential increase in ICTSI’s yield per TEU (container), particularly in the third quarter.
Yet, risks remain. Escalating geopolitical tensions and the temporary halt in privatizing ports in Durban, South Africa are headwinds. These have partly contributed to a 9% drop in ICTSI’s share price over four days after closing at a record PHP 438 a piece on October 8.
Still ICTSI is expected to deliver strong third quarter earnings results. Barring major disruptions, the recent dip in its stock price may present an entry opportunity to investors.
Overall, a cautiously optimistic view is maintained, mindful of risks that may affect ICTSI’s future performance.
GERMAN DE LA PAZ III, CFA serves as an Equity Research Lead in the Investment Services Division of Metrobank Trust Banking Group. His coverage includes gaming, telcos, conglomerates, and utilities, as well as select offshore markets. Prior to joining the bank, he spent 9 years at Abacus Securities, starting as a Junior Investment Analyst and working his way up to Senior Investment Analyst. German holds a Bachelor’s degree in Humanities and a master’s degree in Industrial Economics from the University of Asia and the Pacific. Recently, he obtained his CFA charter and is currently pursuing additional industry certifications. In his free time, German enjoys playing sports, particularly basketball, and has a penchant for reading fiction books, watching suspenseful movies, and listening to music.
ARIZ MARCELINO is an Equity Research Analyst in the Investment Services Division of Metrobank Trust Banking Group. His local market coverage includes banks, consumer, and properties. Additionally, he monitors various sectors and investment themes in the offshore space. Previously, he was with the Markets Research Department, focusing on macroeconomic research and sector analysis. Ariz graduated from New Era University with a degree in Banking and Finance and has cleared the CFA Level 1 exam. He is a certified Financial Modelling and Valuation Analyst and a UITF Sales Person. Outside of work, he unwinds by watching popular sitcoms and anime series while enjoying a cup of hot matcha latte.
CHARLES RANDY LUMHOD is a Management Trainee in the Financial Markets Sector Training Program (FMSTP), currently assigned to the Equities Research Team in the Investment Services Division of Metrobank’s Trust Banking Group. In his current role, he provides analytical support across a broad range of sectors and themes. Charles holds a Bachelor’s degree in Business Administration, majoring in Financial Management, from the University of Santo Tomas, where he graduated cum laude. Moreover, he represented his school in both local and international finance-related competitions as a team leader, focusing on both equity research and fixed income trading. In his leisure time, Charles enjoys staying active by going to the gym and often unwinds at coffee shops to socialize.