Qube Holdings (QUB) – Report card reads well

Qube Holdings (QUB) provides logistics solutions for import and export supply chains in Australia, New Zealand, and Southeast Asia. The company’s operating division offers services relating to the import and export of primarily containerised cargo; provides various logistics services, which includes road and rail transport, warehousing and distribution, container parks, and related services, as well as operates intermodal logistics hubs. The company was incorporated in 2011 and is based in Sydney.

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The Qube business continues to perform well in FY25 to date, albeit with the company reaffirming expectations for modest earnings growth given it is cycling an abnormally strong performance from Patrick stevedoring a year ago Recent around-the-grounds commentary from the company highlights the resilience of group earnings from a broad range of sector, customer and geographic exposures.

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Winter crop harvest reports point to above average yields in the key NSW market, feeding into Qube’s grain trading and downstream logistics infrastructure. Automotive import volumes have retraced materially from 2023 highs, but import/export container volumes have grown, pointing to broader based volume growth within the Patrick Stevedores and Qube logistics operations. The company continues to progress asset sales, which can assist to fund M&A, capital expenditure for projects, and debt repayment. We downgrade our valuation modestly to $4.09 from $4.01 ahead of the 1H25result.

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