Apex Securities has trimmed its earnings forecast for financial year 2025 (FY25) and FY26 to RM64.2mil and RM72.5mil, respectively.
PETALING JAYA: Analysts are generally mixed about Tasco Bhd
’s latest first quarter of the financial year 2025 (1Q25) earnings given the challenging operational landscape within the industry.
Apex Securities in a report said looking ahead, it is turning more cautious on the integrated logistics solutions provider group with a low single-digit growth.
The group’s 1Q25 core net profit at RM10.6mil missed the forecast expectations, accounting for only 13% of both the research house and the consensus’s full-year forecast.
The variance was mainly due to lower bargaining power with customers from higher freight rates and lower-than-expected revenue from the domestic business, Apex Securities added.
Despite the recovery in trade activities and the electrical and electronics sector, the research house said “the industry’s operational landscape remains challenging, due to global geopolitical tensions, volatile freight rates, prolonged high interest rates, and inflationary pressure.”
However, Apex Securities said it remained optimistic about the development of the group’s warehouse capacity, which is expected to create synergistic effect and drive sales in other business segments over the foreseeable future.
In terms of valuation, the research house has trimmed its earnings forecast for financial year 2025 (FY25) and FY26 to RM64.2mil and RM72.5mil, representing a reduction of 20% and 26% respectively.
“This adjustment reflects our lowered expectations for revenue from the domestic business solutions segment, as well as reduced forecasts for warehouse rates and margins in the international business solutions segment,” noted Apex Securities.
Post earnings revision, the research house maintained a “buy” call on the stock with a lower target price (TP) of RM1, while it rolled over its valuation metrics to FY26.
The risks for the group include slower-than-expected global economic and inflationary pressure, which results in sluggish demand.
Meanwhile, MIDF Research has expressed optimism on Tasco’s outlook for FY25. The brokerage firm in a note to clients said it expects a recovery in shipment volumes as trade activities pick up.
It added: “The upcoming tender process for freight forwarding is expected to help Tasco secure higher business volumes for both air and ocean freight forwarding.
“Furthermore, as the utilisation rate for the new warehouses increases, we expect enhanced performance in the contract logistics division and greater opportunities for Tasco to leverage cross-selling.”
The group’s margins are also expected to improve further due to the qualifying capital expenditures claimed under the Investment Tax Allowance, it noted.
MIDF Research has also maintained a “buy”’ on the stock with no changes to its earnings estimates and an unchanged TP at RM1.20.
It noted the key downside risks include losing a major customer, fluctuations in freight rates and a reduction in trade activity.
