KUALA LUMPUR: CJ Century Logistics Holdings Bhd
's procurement logistics segment is expected to remain strong in FY19 as it secures more orders for electrical assembly to be exported mainly to Vietnam, while its courier segment is expected to only breakeven by 2020.
PublicInvest research maintained its neutral call on CJ Century with an unchanged target price of 53 sen.
It said CJ Century's procurement logistics segment improved by threefold during the quarter as it exported to more customers in Vietnam.
"We understand that it has also secured new additional orders for the assembly of electrical products for FY19, e.g. television, air conditioners and fridges. For air conditioners, the volume is typically higher during 2Q and 3Q of the year due to warmer weather."
However, PublicInvest noted that the courier segment will remain a drag on overall earnings in the early years of its operations due to higher operational cost.
It said CJ Century has so far bought 220 trucks and plans to ramp up its fleet size to 250 trucks by the end of th eyear.
The new multi-storey warehouse in Setia Alam is expected to be completed by July 2019 and will increase its sorting caapcity by about 150,000 parcels a day going forward.
In Q318, the segment ran 4,000 to 5,000 parcels a day, which is expected to pick up in Q4 due to the 11.11 sales, brining its courier activities to full capacity at about 10,000 parcels a day.
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