Tasco
KUALA LUMPUR: Analysts are optimistic about Tasco Bhd
’s prospects given the expected sustained growth in throughput volume from its well-diversified customer base and new business wins, following with reopening of the economy.
The logistic player’s net profit jumped 55% to RM24.43mil in the first quarter ended June 30 (1Q23) from a year ago, driven by higher revenue.
Both its international business solutions (IBS) and domestic business solutions (DBS) segments saw growth.
RHB Research said the 1Q23 results exceeded its expectations and the stock was trading at an “attractive” below-peer valuation, presenting a good opportunity to buy Tasco, which has consistent earnings delivery.
“Despite concerns of a recession, we believe that the further economic reopening, coupled with a favourable gross domestic product outlook should provide positive throughput volume for Tasco – made even more attractive by its diverse clientele base.
“The existing supply chain bottlenecks are likely to lead to persistent tightness in air and ocean freight, which Tasco’s IBS segment will stand to benefit from,” it added.
RHB Research added that organic growth from its existing customers is also expected to be sustained, with an additional boost from new business wins within the retail trading segment and cost pass-through exercise.
The construction of a 650,000 sq ft warehouse under phase one of the Shah Alam Logistics Centre expansion should allow the group to capture warehouse shortage opportunities as well, said the research house.
Following the 1Q23 results, RHB Research has raised FY23 to FY25 forecast earnings by 10% to 11% as it revised its throughput assumption for the remainder of the year from flattish to positive growth.
It keeps a “buy” call on Tasco, with a target price of RM2.03.
Meanwhile, JF Apex Securities Bhd has also raised Tasco’s FY23 forecast net profit to RM78.6mil from RM66.3mil, as it lifts its IBS segment revenue and margin forecasts on the back of slower-than-expected tapering of international freight rate.
However, the research house has retained its FY24 net earnings forecast of RM66.4mil with an anticipated tapering of international freight rate.
On Tasco’s outlook, JF Apex Securities said the group’s prospects are in line with the industry’s promising outlook.
“Logistic business thrives on local economic activities and external trade as Bank Negara expects 10.9% and 8.1% year-on-year growth in respect of Malaysian exports and imports for this year,” it added.
