PETALING JAYA: FM Global Logistics Bhd is expected to post steady earnings growth rather than a breakout year.
According to AmInvestment Bank Research (AmResearch), growth will be underpinned by resilient domestic trade flows, improving warehouse utilisation and an attractive dividend yield, although analysts see limited upside to its current valuation in the near term.
The research house has initiated coverage on the logistics group with a “hold” call and target price of 60 sen, saying the stock’s defensive earnings profile is balanced by modest growth prospects.
It expects FM Global’s net profit to rise to RM33.5mil in financial year 2026 (FY26) ending June 2026 from RM31.1mil in FY25, supported by what it described as steady volume growth rather than explosive year for FM Global with earnings forecast to expand about 6% year-on-year.
Revenue is projected to edge up to RM965.9mil from RM952.8mil previously.
It noted that while Malaysia’s trade outlook remains moderate, with projected expansion of 3.3% in 2026 and gross domestic product or GDP growth of 4.5%, FM Global’s predominantly domestic exposure should provide stability as 66% of revenue is generated locally.
“We expect FM Global to deliver steady volume growth rather than a breakout year,” the report said, adding that low single-digit freight volume growth of 1% is assumed for FY26.
A key attraction remains FM Global’s earnings resilience despite freight-rate volatility. The analyst said investors often misread the company as a freight-rate proxy when in fact much of its freight revenue reflects pass-through costs rather than core profitability.
“FM Global earnings are tied to cargo volume, 3PL and operating efficiency rather than spot freight rate,” the report said, pointing to first-half FY26 results where profit after tax and minority interests rose 11% year-on-year despite a 6% decline in revenue following softer freight rates.
This resilience is supported by FM Global’s asset-light freight forwarding model, coupled with selective strategic warehouse ownership.
Its Port Klang warehouse expansion is emerging as a key growth driver, with the Lot 16 facility already operational and the Setia Alam landbank offering room for further logistics capacity expansion.
Higher warehouse contribution is expected to gradually improve earnings quality through more value-added services such as pick-and-pack, labelling and nationwide distribution.
AmInvestment said FM Global’s appeal also lies in its dividend profile. Although the group has no formal dividend policy, it paid out 81% of earnings in FY25 and is expected to maintain a 75% payout ratio in FY26, translating into a 4.5 sen dividend per share and an estimated yield of about 8%.
“We view FM Global as one of logistics players that offer stable earnings and high dividend yield,” it said, noting that the stock is trading on a forward free cash flow yield of between 6% and 9%, which should continue to support regular shareholder returns.
That said, a stronger rerating would require faster cargo growth, firmer export momentum and clearer monetisation of new warehouse capacity. Until then, the research house believes the stock fairly reflects its position as a defensive, yield-backed logistics name, rather than a high-growth re-rating story.
