MBSB Investment Bank Bhd (MBSB Research) maintained its BUY call on Tasco Bhd but cut its target price to RM0.49 from RM0.56, saying the logistics group’s earnings outlook should improve progressively despite a weaker-than-expected start to FY27.
MBSB Research said 1QFY27 core earnings fell 21.7% quarter-on-quarter and 32.5% year-on-year, accounting for only 18% of its and 15% of consensus’ full-year forecasts. The research house lowered its FY27 and FY28 earnings estimates by 7.1% to 9.3% to reflect softer performance across ocean freight forwarding, cold chain and trucking.
Near-term freight disruptions could benefit Tasco’s air freight business, with urgent cargoes shifting from ocean to air amid vessel shortages linked to the Middle East conflict. Ocean freight rates from Malaysia also rose sharply in June and July as carriers redirected capacity to higher-rate markets.
Meanwhile, two new warehouses at the Shah Alam Logistics Centre and Port Klang Logistics Centre, totalling 700,000 sq ft, are expected to come online this month. Around half the capacity has already been earmarked for occupancy or internal consolidation, while existing mature facilities remain around 90% utilised.
However, MBSB Research expects the cold chain segment to remain subdued after the loss of a major ice-cream account, while cross-border trucking continues to face inefficiencies from imbalanced loads between Malaysia and Singapore.
The revised RM0.49 target price is based on 9.0 times FY28F earnings. MBSB Research said the valuation remains attractive at around one standard deviation below Tasco’s five-year mean, with the stock offering an expected total return of 33.9%.
As of 10.49 am, the stock price gained 1.30% to RM0.39.
