Maybank Investment Bank (Maybank IB) remained cautious on Swift Haulage Bhd’s (Swift) outlook despite growth in warehousing and container depot (W&CD) segment due to recent capacity expansion as the uptake maybe slow.
Besides that, in its research note yesterday (Jan 15), the research house said the container haulage (CH) and freight forwarding (FF) segments are being negatively impacted by macroeconomic headwinds, posing downward risks to rates and volume handled.
“However, we believe its share price has largely reflected the headwinds,” it said in its research note yesterday (Jan 16).
The research house maintains its HOLD call, its earning forecasts and TP of RM0.52 for Swift, based on 7.0x FY24E EV/EBITDA, in line with its peers’ 5Y historical mean.
Last week, Swift has announced that it is disposing its 12.5% stake in 42.5%-associate, Global Vision Logistics Sdn Bhd (GVL) to IJM RE Sdn Bhd, a subsidiary of IJM Corporation Bhd, for RM44.3 million.
“Post disposal, Swift’s holding in GVL will reduce to 30%. The sale will result in a one-off gain of RM11m million or 1.3 sen per share,” it said.
According to Swift, the gain from the disposal of RM11 million will be reflected in 1Q24, the research house said.
“The proceeds will be utilized for working capital and repayment of borrowings. Our back-of-the-envelope calculation shows that the net
proceeds of RM43 million, excluding RM1.3 million for payment of real property gains tax (RPGT), will reduce its net gearing to 0.89x from 0.96x as of end-3Q23.”
Maybank IB said it has yet to incorporate the contribution from GVL into its forecasts.
“According to Swift, the disposal price represents a slight discount to GVL’s net tangible assets (NTA) due to a minority stake that is being sold, but there are no details on the amount.
“GVL is now constructing the Shah Alam International Logistics Hub (SAILH) with IJM (IJM MK, BUY, CP MYR2.19, TP MYR2.20) as the contractor for phase one.”
“GVL’s earnings contribution is expected to commence in 1H24, upon the completion of Phase 1 construction. Swift plans to lease 500,000 sq ft of warehouse space from GVL to be subleased to its clients, and anticipates a revenue of RM1.2 million per month, excluding additional handling services,” it said.
