TASCO’s full FY11
revenue and earnings stood at RM469.2m (+6% y-o-y) and RM34.7m (+40% y-o-y)
respectively. While revenue was a slight
6.8% below our forecast, its earnings
beat our projection by 22% as it enjoyed a one-off tax rebate. Stripping off the tax
rebate, the group’s core earnings of RM32m were above our estimates by 12%,
with 23% y-o-y growth. TASCO declared a gross DPS of 11.6 sen and 1.3 sen
tax-exempt dividend, at a higher payout ratio of 43% vs in FY10, which
translates into a dividend yield of 8%. With revenue falling short of our
estimates, we tweak down our revenue and earnings forecasts by 6% and 5% respectively
for FY12. We maintain our BUY call on TASCO and revise upward our FV from
RM2.10 to RM2.18 as we roll over to FY12 EPS with a PER of 6.5x owing to the
group’s good progress with its contract logistics business.
Contract logistics provides the spark. TASCO’s FY11 results beat our estimates by 22% as
earnings surged 40% y-o-y to RM34.7m as the group enjoyed a one-off tax rebate. Excluding the tax gain,
its core earnings will be RM33m, (+38% y-o-y), which is in line with our
expectation. The key performer was the core division of contract logistics, making
up 44% of group total revenue, grew by 9% y-o-y and chalking up
a stellar operating profit margin
of 84% for FY11 in view of strong expansion in its 3PL business with MNCs
involving comprehensive solutions encompassing warehousing, air, sea and land
freight services. Due to the urgent nature of these shipments, air freight revenue grew 4% in revenue and posted
operating profit margins as wide
as 60% in FY11 on high volume of
shipments, particularly for replacement parts to Japan after the tsunami,as
well as better cost management. On a
q-o-q basis, however, TASCO’s overall business registered negative growth
owing to seasonal factors and the fewer number of working days.
Strong margins growth. The group’s EBITDA of RM53.1m and PBT
of RM37.4m improved by 16% and 14% y-o-y respectively, thanks to the
management’s prudent cost control and strong growth in its domestic business,
especially the 3PL and warehousing segments. TASCO’s international business
solutions segment continued to see narrowerPBT margins due to stiff competition
in sea and air freight rates. Having said that, we believe the group will
continue to boost margin going forward as we
expect it to wield stronger bargaining power as
shipping liners volume picks up
in its contract logistics business.
Source: OSK188
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