PETALING JAYA: Capital A Bhd
’s integrated logistics arm, Teleport, is expected to contribute RM50mil to RM60mil in quarterly earnings once it reaches its two million daily parcel delivery goal by year-end.
Future capacity growth will primarily come from third-party partners, which has grown 125% in the first quarter of 2025 (1Q25), Hong Leong Investment Bank (HLIB) Research said in a report.
Teleport hit a daily peak of 509,000 parcels, with a total of 27.8 million parcels delivered in 1Q25.
Following a successful turnaround in 4Q24, Teleport remained in the black in 1Q25 with a RM400,000 profit.
This positive trend reflects higher cargo volume, stronger eCommerce delivery demand, and improved network utilisation. It had also benefited from a weaker US dollar.
The research house maintains its “buy” call on Capital A with a target price of RM1.68 a share.
This is based on the implied valuation of RM6.8bil for its aviation business and RM2bil for the non-aviation segments, assuming a conservative 10 times multiple on projected financial year 2025 profits.
The shares traded at 86 sen at the time of writing.
HLIB Research is confident in Capital A’s outlook, underpinned by robust air travel recovery, tailwinds from US dollar weakness and lower jet fuel prices.
The successful execution of the group’s Practice Note 17 regularisation plan could unlock further investor confidence and valuation re-rating.
Touching on the impact of jet fuel prices, the research house said it was marginal, as most cargo is carried in the belly space of AirAsia and third-party airlines, where pricing is demand-driven.
In the 1Q25, the group’s cargo volume split was as follows: 77.4% via AirAsia Aviation, 14.3% via Teleport’s freighters, and 8.3% via third-party airlines.
Teleport was launched in 2018 and has rapidly evolved into one of the group’s key non-aviation businesses.
