HLIB Research has an unchanged forecast for Capital A.
PETALING JAYA: Capital A Bhd
’s outlook is expected to improve as the company, which operates budget airline AirAsia and owns a number of digital lifestyle and travel platforms, leverages a robust recovery in air travel, a weaker US dollar and lower jet fuel prices, analysts say.
Hong Leong Investment Bank Research (HLIB Research), which has maintained a “buy” recommendation on the stock with an unchanged target price of RM1.68, said the company’s management has guided for a seasonally stronger second half of this year for Teleport, the company’s integrated eCommerce logistics unit, with peak performance expected in the fourth quarter of this year (4Q25).
“Teleport is projected to contribute RM50mil to RM60mil in quarterly earnings once the two million parcels per day milestone is achieved,” the research house said.
Teleport remains on track to achieve its target of delivering two million parcels per day by the end of this year, compared with the current peak daily volume of 509,000 parcels.
The logistics unit continued to deliver positive core net earnings in 2Q25, hitting RM3.2mil (up from RM400,000 in 1Q25), primarily driven by stronger contributions from the eCommerce segment, reduced staff costs, an optimised cost structure that benefits from leveraging connectivity with third-party partner airlines, and lower net finance costs.
“While total tonnage declined slightly by 0.5% quarter-on-quarter (q-o-q), the number of parcels delivered grew by 13.7% q-o-q.
“This growth reflects Teleport’s ongoing network expansion across Asia and its continued push into new markets, including Oceania, the Middle East, Europe and Africa through partnerships with third-party airlines,” HLIB Research noted.
The research house said that Teleport’s financial position has been strengthened with the successful refinancing US$35mil worth of debt at a lower interest rate and more favourable repayment terms, with the weaker greenback seen as being beneficial, given that a large portion of the cost “is denominated in US dollars while only 15% of its revenue is US dollar-based and the remaining 85% in local currencies”.
The research house has an unchanged forecast for Capital A, pointing out that the successful execution of the regularisation plan to exit Practice Note 17 status, which Capital A was placed under in January 2022 due to financial difficulties, primarily caused by the COVID-19 pandemic, could unlock further investor confidence and valuation re-rating for the group.
