TASCO
Tasco Berhad
Company Background
8 Stocks in the Logistics Sector!
The Logistics Sector, which includes land, sea, and air transportation, is crucial to the global supply chain and is often said to be the lifeblood of the economy. When logistics are disrupted, inflation tends to follow as importers and exporters tend to pass through the costs to their customers. Today, we've highlighted eight companies who are key players in the logistics sector. Interestingly, one is currently undergoing a privatization exercise highlighting corporate interest in this area.
Did any of these companies catch your interest? Let's discuss in the comment section below!
$MISC / 3816 (MISC BERHAD) $AIRPORT / 5014 (MALAYSIA AIRPORTS HOLDINGS BERHAD) $TASCO / 5140 (TASCO BERHAD) $WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD) $BIPORT / 5032 (BINTULU PORT HOLDINGS BERHAD)
PETALING JAYA: Logistics solutions provider Tasco Bhd is expected to see stronger earnings in the coming quarters of its financial year ending March 31, 2025 (FY25), supported by strategic selling-price adjustments and improved margins, according to analysts.
$TASCO / 5140 (TASCO BERHAD)
The positive outlook for TASCO in 1QFY25 and beyond is driven by several key factors:
Improving Freight Forwarding Segment:
The freight forwarding business, which includes air freight forwarding (AFF) and ocean freight forwarding (OFF), has shown signs of improvement. Although the AFF segment had a weaker 1QFY25 due to the need to honor existing contract prices despite rising market costs, the outlook is set to improve. This improvement is expected as higher tender prices, which will be implemented from July onwards, should lead to better margins.
Volume Recovery:
TASCO is expected to see a recovery in volume across its logistics services. This recovery is likely driven by the anticipated growth in demand as market conditions stabilize and improve, benefiting both the freight forwarding and contract logistics segments.
Contributions from New Warehouses:
The company has recently added two new warehouses (SALC and WPLC) with a total space of 850,000 sqft. These warehouses are expected to contribute fully to TASCO's earnings moving forward, providing a significant boost to the company’s revenue and profitability.
ILS Tax Incentive:
TASCO benefits from integrated logistics services (ILS) incentives, which include available tax credits. The company has over MYR32 million in unclaimed tax credits, which will continue to provide tax benefits and enhance profitability in the coming quarters.
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy – TP RM1.15
“Still Upbeat On FY25F Growth; Stay BUY"
Maintain BUY and MYR1.15 TP, 36% upside with c.3% FY25F (Mar) yield. After attending TASCO’s results briefing, we remain upbeat on its prospects for FY25 and beyond. This is mainly driven by: i) An improving freight forwarding segment, ii) volume recovery, iii) contributions from new warehouses, and iv) available tax credits from integrated logistics services (ILS) incentive. For a leading integrated logistics player, we believe TASCO’s current valuation is appealing, considering its exposure to diverse businesses, robust cash flow generation, and strong growth prospects.
Analysts:
Syahril Hanafiah
syahril.hanafiah@rhbgroup.com
Lee Meng Horng
lee.meng.horng@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by MIDF
Buy – TP RM1.20
“Optimism Grows for the Upcoming Quarters"
• Tender prices adjusted higher to counter freight rate increases
• Trailer detention charges introduced amid port congestion
• Strong storage revenue keeps cold chain business resilient amid change in consumer preference
• No changes to earnings estimates
• Maintain BUY with an unchanged TP of RM1.20
Analyst:
MIDF Research Team
research@midf.com.my
$TASCO / 5140 (TASCO BERHAD)
Research by Apex
Buy – TP RM1.00
“Warehousing to drive growth in 2026"
Valuation. We kept our earnings forecast unchanged post-meeting, as the recent updates aligned with our expectations and forecasts. We reiterate our BUY recommendation with an unchanged target price of RM1.00.
Analyst:
Jayden Tan
kdtan@apexsecurities.com.my
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy – TP RM1.15
“Sector Tailwinds To Prevail; Maintain BUY"
Maintain BUY and MYR1.15 TP, 28% upside and c.3% FY25F (Mar) yield. 1QFY25 missed expectations due to slower business from the contract logistics (CL) segment and unfavourable FX impact. Nonetheless, we expect better quarters ahead, buoyed by a favourable freight forwarding market, volume recovery, and contributions from new warehouses. TASCO’s current valuation is attractive for a leading integrated logistics player with diversified business segments, solid cash flow generation, and growth prospects. This report marks transfer of coverage to Syahril Hanafiah.
Analysts:
Syahril Hanafiah
syahril.hanafiah@rhbgroup.com
Lee Meng Horng
lee.meng.horng@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by MIDF
Buy – TP RM1.20
“Optimism for FY25"
• 1QFY25 earnings met our estimate
• New warehouses to see increased utilisation
• Shipment volume recovery ahead
• No changes to earnings estimates
• Maintain BUY with an unchanged TP of RM1.20
Analyst:
MIDF Research Team
research@midf.com.my
$TASCO / 5140 (TASCO BERHAD)
Research by Apex
Buy – TP RM1.00
“Sub-par performance"
• Tasco’s 1QFY25 core net profit at RM 10.6m missed our expectations.
• Looking ahead, we are turning more cautious with low single-digit growth, due to the challenging operational landscape within the industry.
• We maintain our BUY recommendation with lower target price of RM1.00 by pegging PE multiple of 11.0x to FY26F EPS of 9.1 sen.
Analyst:
Jayden Tan
kdtan@apexsecurities.com.my
APEX Securities TOP PICKS 2ND HALF 2024...
Turning more selective and defensive.
Moving into 2H24, we advocate a more defensive stance to focus onto laggard plays. We continue to favour the construction sector in anticipation of more aggressive rollout in private and public infrastructure jobs as billings shift into higher gear. Meanwhile, we also like the property sector that is well positioned to capitalise onto development key mega transport projects that may uplift demand for property projects in selected vicinities. The technology sector remains in focus in view of the recovery in world semiconductor sales, leveraging onto the rise in AI industry, could computing and Internet of Things (IoT). We favour the healthcare sector, particularly gloves players which saw fortunes turning around with majority of the players returning to the black, while healthcare services providers and equipment manufacturers stands to benefit from the larger allocation under recent and upcoming Budgets.
$QES / 0196 (QES GROUP BERHAD) $MATRIX / 5236 (MATRIX CONCEPTS HOLDINGS BERHAD) $AME / 5293 (AME ELITE CONSORTIUM BERHAD) $TASCO / 5140 (TASCO BERHAD) $SLVEST / 0215 (SOLARVEST HOLDINGS BERHAD)
Integrated logistics player Tasco Bhd remains attractive for its diversified business segments, giving it solid cash flow generation and strong growth prospects and healthy dividend yields.
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy (Maintained) – TP RM1.15
“Ground Checks: Post-Results Briefing Takeaways; BUY"
Maintain BUY and MYR1.15 TP, 36% upside and c.4% FY24F (Mar) yield. We came away from TASCO’s post-results briefing and site visits remaining upbeat on FY25 and beyond. This is driven by: i) Recovery in trade activities, ii) regional business projects, iii) contributions from new warehouses, and iv) a lower effective tax rate.
Analysts:
Nai Wan Yan
nai.wan.yan@rhbgroup.com
Lee Meng Horng
lee.meng.horng@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by Apex
Buy – TP RM1.12
“Site visit to new expanded SALC warehouse"
No change to earnings forecast at RM81.7m and RM105.1m for FY25F and FY26F respectively. Re-iterate BUY recommendation with unchanged target price of RM1.12.
Analyst:
Jayden Tan
kdtan@apexsecurities.com.my
Tasco Bhd, which reported its weakest annual net profit in three years for the financial year ended March 31, 2024 (FY24), will see contributions from its new higher-margin warehouses kicking in FY25.
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy (Maintained) – TP RM1.15
“Brighter Prospects In FY25; Maintain BUY"
Maintain BUY, new MYR1.15 TP from MYR1.19, 38% upside with c.4% FY24F (Mar) yield. While 4QFY24 showed sequential bottomline recovery, FY24 earnings were still slightly below expectations. We remain upbeat for FY25 and beyond, given: i) Trade activity recoveries, ii) regional business projects, iii) contributions from new warehouses, and iv) higher tax savings credits. TASCO also declared a final dividend of 2.35 sen/share.
Analysts:
Nai Wan Yan
nai.wan.yan@rhbgroup.com
Lee Meng Horng
lee.meng.horng@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by MIDF
Buy (Maintain) – TP RM1.20
“Brighter Horizons"
Maintain BUY. We adjusted our projections for FY25F/FY26F earnings downward by -7.6% after updating the full-year figures. As a result, our target price is now slightly reduced to RM1.20 (from RM1.30). We maintain our BUY recommendation on Tasco due to its undemanding valuation, currently trading at 9.1x FY25F EPS or -1 SD of its 5-year historical mean. Key downside risks are: (i) potential delays in handing over the new warehouse space to customers and (ii) volatility in freight rates.
Analyst:
MIDF Research Team
research@midf.com.my
TASCO - Notice of Book Closure
OTHERSTASCO BERHAD ("TASCO")
- Outstanding Related Party Receivables
Final Dividend
Quarterly rpt on consolidated results for the financial period ended 31/03/2024
TRANSPORTATION
$TASCO / 5140 (TASCO BERHAD) $KLSE-FREIGHT $WPRTS / 5246 (WESTPORTS HOLDINGS BERHAD) $AIRPORT / 5014 (MALAYSIA AIRPORTS HOLDINGS BERHAD)
Research by RHB
Overweight (Maintained)
“4Q23 Earnings Wrap”
Of the four companies under our coverage that reported results – Westports exceeded expectations, MAHB came in line, while FM Global and TASCO fell below estimates. We like MAHB as an evident recovery play, and our preference for TASCO within the logistics sector is premised on its diversified client base and business segments that will sustain earnings base, and the Integrated Logistics Services (ILS) tax incentives that offer a buffer against sector headwinds.
Analyst(s):
Nai Wan Yan
nai.wan.yan@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by Apex
Buy - TP of RM1.12
"Riding onto path of recovery"
• Tasco’s 9MFY23 core net profit at RM43.9m came below our expectations.
• Looking ahead, we expect better performance, in anticipation of recovery in external trade and contribution from new warehouse capacity.
• We maintain our BUY recommendation with lower target price of RM1.12 by pegging PE multiple of 11.0x to FY25F EPS of 10.19 sen.
Analyst:
Jayden Tan
kdtan@apexsecurities.com.my
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy(Maintained) - TP of MYR1.19
"Post-Results Briefing Takeaways; Keep BUY"
Keep BUY, new MYR1.19 TP from MYR1.35, 47% upside with c.4% FY24F (Mar) yield. Following our post-results briefing and site visits with TASCO, we lower our FY24F-26F earnings by 11-13% to account for the slow volume recovery and delay in the handover of the Shah Alam Logistics Centre (SALC). While adopting a more conservative outlook on overall FY24 prospects, we stay upbeat on FY25 and beyond, driven by: i) Trade activity recoveries, ii) regional business projects, iii) contributions from new warehouses, and iv)
higher tax savings credits. A final dividend can also be expected in 4QFY24.
Analyst(s):
Nai Wan Yan
nai.wan.yan@rhbgroup.com
Lee Meng Horng
lee.meng.horng@rhbgroup.com
Analysts generally expect Tasco Bhd to post stronger quarters ahead, in anticipation of a recovery in external trade activities and contribution from its new warehouse capacity.
$TASCO / 5140 (TASCO BERHAD)
Research by RHB
Buy (Maintain) – Target Price RM1.35
“A Stronger FY25 In Sight; Still BUY”
Still BUY and MYR1.35 TP, 55% upside with c.4% FY24F (Mar) yield. 9MFY24 earnings were slightly below expectations as we expect TASCO to book stronger numbers ahead – supported by a recovery in trade activities, sector tailwinds, contributions from new warehouses, and recognition of tax incentives. Trading at only 7.4x P/E – a discount to local and regional peer averages of 13x and 20x – its valuation is attractive for a leading integrated logistics player with diversified business segments, solid cash flow generation, healthy dividend yields, and growth prospects.
Analysts:
Lee Meng Horng
lee.meng.horng@rhbgroup.com
Nai Wan Yan
nai.wan.yan@rhbgroup.com
$TASCO / 5140 (TASCO BERHAD)
Research by MIDF
Buy (Maintain) – Target Price RM1.30
“Glimpsing Stronger Quarters Ahead”
Maintain BUY. We maintain our earnings estimates, with a potential revision pending further insights from a scheduled management briefing on 5 February 2024. Our TP is unchanged at RM1.30 (13x FY25E EPS). The stock is trading at a -40% discount to its 5-year historical mean. Key downside risks are: (i) volatility in freight rates and (ii) underutilisation of the newly constructed warehouses.
Analyst:
MIDF Research Team
research@midf.com.my