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Cogent Holdings Ltd’s Stock Price Is Up 641% In 5 Years: Here Are 4 Ways The Company Makes Money

Cogent Holdings Ltd (SGX: KJ9) is a big winner in Singapore’s stock market. Over the past five years, its stock price has jumped by 641%.

This strong performance captured my attention and prompted me to look deeper into the company to learn just how it makes money. What I have below is a quick summary of my study.

The revenue sources

The chart below shows Cogent’s revenue from 2013 to 2015. It also breaks down the company’s revenue in each year by its different business segments:

Cogent revenue segment chart
Source: Cogent 2015 annual report

Warehousing and Property Management Services was the biggest revenue contributor to the company in 2015, accounting for about 40% of the overall top-line.

This segment is involved with the rental of warehouses and it also provides warehousing services including packing, drumming, and other ancillary services. In addition, the segment also provides property management services. At the end of 2015, Cogent was managing and operating 3.6 million square feet of covered and open storage spaces.

The next largest segment in 2015 was Automotive Logistics Management Services. As the name suggests, this is where Cogent provides logistics management services for automobiles in Singapore. The company had over five storage facilities and the capability to store more than 3,000 cars at multiple locations, according to its 2015 annual report.

The logistics services provided in the segment range from customs processing and transportation, to storage of motor vehicles within Cogent’s own warehouses. These are supported by round-the-clock operations with 24/7 call centre assistance.

Just behind Automotive Logistics Management Services is Transportation Management Services. Under the latter segment, Cogent provides transportation services in Singapore for laden and empty containers and other cargoes. It also provides dry hubbing logistics solutions and project cargo services.

The Transportation Management Services segment operated over 100 prime movers and 400 trailers at the end of 2015, serving a wide range of industries such as steel, construction, marine and OPEC (Oil, Petroleum, Energy and Chemicals). The segment’s customers also include third party logistics service providers.

We’re now down to the smallest revenue contributor in 2015 and it is Container Depot Management Services.

This segment sees Cogent operating one of the largest local private container depot premises in Singapore at a single location which can store more than 20,000 TEUs (Twenty-Foot Equivalent Units). The segment also offers value-added services such as a dedicated fleet of trucks to transport empty containers; the adoption of Electronic Data Interchange (EDI) interfacing for efficient information flow; and equipment and container repair works.

In 2016, the company expanded its scope of operations in the segment with the opening of its Cogent1.Logistics Hub.

A Foolish conclusion

As we’ve seen, there are a number of moving parts associated with Cogent’s business. Yet, each part is closely related to the others since the company has a business model of providing integrated logistics solutions.

By breaking down the revenue sources for Cogent, investors can better understand the risks and opportunities associated with the company’s business. This can help investors better judge the long-term prospects of Cogent.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.