PETALING JAYA: Built-in logistics supplier Swift Haulage Bhd’s strong development potential and upcoming enlargement of warehouse area, coupled with its higher-than-industry revenue margin and bettering gearing ranges have resulted in it being given an “outperform” name by a analysis home.
Kenanga Analysis, which initiated protection on the corporate yesterday, mentioned it was constructive on the group due to these components.
The corporate’s built-in operations, scale and attain “embodies the essence of Swift’s enterprise mannequin,” it advised purchasers within the initiation report.
“Being built-in, Swift has presence within the logistic continuum that spans container haulage, land transport, warehousing and freight forwarding.
“It’s the nation’s dominant prime mover operator with the prospects of its container haulage enterprise using on containerized throughput imports and exports pushed by Malaysia’s continued sturdy commerce figures,” the analysis home mentioned.
Within the report, Kenanga additionally identified that Swift’s earnings captured regular recurring revenue from its petrochemical section by which it had secured a contract in November 2018 for a interval of three years, with an extension possibility for an additional two years.
That is to handle a third-party warehouse, which gives exponential future enterprise alternative particularly in periods of rising crude oil worth, it mentioned.
The corporate has additionally additional expanded its portfolio of diversified blue-chip clients that collectively contributed 33% of its 2021 income, mentioned Kenanga.
It mentioned 2022 to 2023 will see Swift having fun with sustainable excessive single-digit margins with the increasing warehousing/container depot enterprise and additional freight forwarding development outpacing the remainder.
“There shall be monetary price financial savings from the anticipated utilization of preliminary public providing proceeds to repay borrowing and utilization of funding tax allowances that lowers tax fee in 2021 and 2022, with spill-over into 2023,” Kenanga added.
Swift’s previous enterprise efficiency displays superior working efficiencies and monetary metrics relative to friends because of sheer measurement, geographical attain and the built-in nature of its enterprise mannequin, it mentioned.
The analysis home initiated protection on Swift yesterday with an “outperform” score and a goal worth of RM1.01.
Primarily based on the inventory’s final traded worth of RM75 sen, the entire group is valued at some RM667mil.
Kenanga warned that lower-than-expected gross sales and margins and a delay in its main warehousing enlargement plans remained dangers for Swift.