Freight forwarders big gainers on Bursa

MCO has spurred adoption of online shopping habits in Malaysian psyche and the habit is here to stay and will only grow


LOGISTICS services counters on Bursa Malaysia traded mixed in the past year, with freight forwarders gaining the most from improved trade activities and a surge in e-commerce shipments since the Covid-19 pandemic began.

The rollout of vaccines to combat the pandemic has not dimmed investors’ interest in logistics players, with GDEX Bhd MD and group CEO Teong Teck Lean telling The Malaysian Reserve (TMR) that cargo volume movement had normalised at a higher base post-Movement Control Order (MCO) 1.0 as a result of the migration from offline to online distribution by businesses and individuals.

As a result, Tasco Bhd has seen its share price posting the biggest gain so far, rising by RM4.60 or 400% from RM1.15 a year ago to yesterday’s close of RM5.75, as both its revenue and net profit reported increases in the last three consecutive quarters.

The stock’s rapid gain added RM808 million to its market valuation, with its current four-week average trading volume at 2.05 million.

An analyst at a local brokerage, who made a comment on condition of anonymity, said Tasco is one of the few counters on the logistics index that has shown a steady uptick in trading volume given its stellar quarterly performance.

“This is also due to expectation the performance is going to be sustainable driven by investment tax allowance and its air freight forwarding division.

“We believe the e-commerce industry is on track for expansion. The MCO has spurred the adoption of online shopping habits in Malaysian psyche. We believe the habit is here to stay and will only grow, with or without the extension of MCO,” the analyst told TMR.

GDEX’s share price also climbed 13.5 sen or 54% to 38.5 sen over the same period, taking its market capitalisation from RM1.49 billion to RM2.11 billion.

Higher demand for courier services throughout the MCO period saw its turnover rising to RM108.61 million in its first quarter ended Sept 30, 2020 (1Q21), from RM83.04 million the year prior.

Other freight forwarders that have made gains over the period include Freight Management Holdings Bhd, See Hup Consolidated Bhd, Integrated Logistics Bhd and Xin Hwa Holdings Bhd.

Data compiled by Bloomberg showed over half of the stocks on Bursa Malaysia’s Transportation and Logistics Index climbing in value in the last 12 months, adding some RM3 billion to their market capitalisation in total.

Top decliners, Malaysia Airports Holdings Bhd, Pos Malaysia Bhd and MISC Bhd, however, saw RM8.69 billion wiped out from their valuation combined over the period.

Pos Malaysia’s shares have not been able to break out from its sideways channel since the start of the year, trading at between 98 sen and RM1.12 per share, which falls short of its 52-week high of RM1.42 reached on Feb 17, 2020.

To recap, the counter plunged to a 52-week low of 55 sen on the day the first MCO took effect. The company closed half-a-sen or 0.5% lower at 99 sen yesterday, giving it a market valuation of RM774.95 million.

Kenanga Investment Bank Bhd analyst Wan Mustaqim Wan Abdul Aziz said given the parcel volumes have always been on the high side, most of the positives for Pos Malaysia have been priced in for now.

“We maintain our ‘Market Perform’ call on Pos Malaysia at RM1,” he said.

Pos Malaysia’s net loss narrowed to RM7.43 million in 3Q ended Sept 30, 2020, from RM19.02 million in the preceding quarter, attributed to easing nationwide movement restrictions and the resumption of economic activities.

Despite the smaller net losses in 3Q20, the national postal service provider has been loss-making for nine consecutive quarters.