TASCO was incorporated on 10 Sep 1974,  listed on the Main Market of Bursa Malaysia on 28 Dec 2007.

TASCO is a subsidiary of Yusen Logistics Co. Ltd., which in turn is a subsidiary of Nippon Yusen Kabushiki Kaisha. TASCO has 24 logistics centres and 2,200 employees in Malaysia. It is a part of the global network of Yusen Logistics Co. Ltd having 594 locations and 24,713 employees worldwide as at 31 March 2020.

TASCO offers logistics solutions covering air, sea and land transportation. It serves as a one stop logistics centre to handle domestic and international shipments for customers.

Business Segment :-
a) Contract Logistics Division
b) Air/Ocean Freight forwarding Division
c) Trucking Division
d) Cold Supply Chain Division

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TASCO BERHAD (5140) - Our Thinking

Monitor Tasco if price and volume move up as something could be brewing in Tasco

  The share price has been moving up from RM1.27 to a high of RM2.10 (and closed RM2.03 on 20 Oct) since the Co briefed investors on the Co’s development and prospect in mid Sept. Market talk of Tasco riding on Covid 19 Vaccine wave also lifted it up.

  “Inter-Pacific ‘Neutral’ on TASCO’s potential vaccine contract” which appeared in the Malaysian Reserve on 14 September 2020 (“Article”). The Article mentioned that TASCO revealed that the Ministry of Health (“MOH”) has engaged the Company for potential services in providing logistical support in distributing the Covid-19 vaccine and that the vaccine distribution is expected to commence by the end of the year.

  However, on 20 October the Co announced that “The Board of TASCO wishes to clarify that the Company has not been engaged by the MOH to provide logistical services for distributing the Covid-19 vaccine. In connection to this, the information in the Article was inaccurate.

  Given that " Tasco mother company, Yusen logistic is a global GDP standard certified shipping house with the technical know-how and experienced  in handling the healthcare / Pharmaceutical logistic ,"

https://www.yusen-logistics.com/en/industries/healthcare-logistics/

  We are inclined to opine Tasco is a front runner with MOH on Covid 19 Vaccine Distribution and Storage as the Co has the largest cold room facilities throughout the country.

  We are not surprise MOH has engaged and assessed the Co capability of playing a role in the distribution and storage of Covid 19 Vaccinne and Co are binded by non-disclosure agreement as it could involve other listed GLC Co like Pharmaniaga and Dpharma.

Merits of Looking at Tasco

• Strong performance from Cold Supply Chain Logistics (“CSCL”).

          Reaping the harvest of the strategic expansion into CSCL business coupled with convenience retail logistics (“CRL”) business during the past two (2) years as it has gained market share in the FMCG sector and synergised it operation for cost optimisation and efficiencies. Potential ride on Covid 19 Vaccine. Total logistics solutions providers with business picking up after the MCO with improvement in top and bottom lines

•  International Business Solution Segment

              Tasco is riding high (tapping into Yusen “owned” cargo plane) on high air freight rate due to global shortage of air cargo space as passenger flights providing belly cargo space are reduced as border controls and safety measures are enforced in many parts of the world. Its air freight forwarding service will be a star performer.

• PBT for the segment surged 68% QoQ in 1QFY21 (+MYR1.2m), as Tasco was able to pass on the spike in air freight charges to customers with urgent shipments amidst limited flight capacity, aided by its regional logistics network as a 65%-owned subsidiary of NYK Group.

• PAT to be uplift via Incentive Tax Allowance (ITA) FY21E-22F granted by MIDA. Approval from Malaysian Industrial Development Authority (MIDA) on application by TASCO Berhad (the "Company") for Second Round of Integrated Logistics Services Tax Incentive as an Expansion Project

  Refer to Co announcement dated 26 Aug 2020
         https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3087390

• Upgrade to Buy with revised TP of RM2.23 per share by MIDF dated 1 Oct and RHB giving it a fair value of RM2.60

• MIDF report dated 1 Oct had forecasted the Co to make a net profit of RM39.8 mil with EPS of 20 Sen for FY 2021 31 March with a TP of RM2.23

• RHB report dated 11 Sept had forecasted the Co to make a net profit of RM32 mil with EPS of 16 Sen for FY 2021 31 March with a fair value of RM2.60.

  FINANCIAL

• The Co has a strong balance sheet with net asset of RM2.17 and cash in hand of RM107 mil or 53 Sen per share. The Co has a net gearing of 0.32

  Prospects for the Remaining Period to the End of the Financial Year

• The Group’s diversification since 2017 into Coldroom Supply Chain (CSC), which currently deals mainly in food and beverage as well as convenience retail (including pharmaceutical retail sub-sector), has proven to be pivotal to our performance during the MCO period as demand for these sectors has remained strong during the lockdown.

• Hence, the impact to our business resulting from the MCO was strongly mitigated, proving the resilience of our business model once again. Moreover, since the relaxation of the MCO to the less restrictive CMCO and RMCO phases, we have noted that our business volume has picked up significantly to pre-pandemic levels as our customers re-started their operations and backlogs and pent-up demands are being fulfilled. This, coupled with our strong actions to control and reduce unnecessary costs, has resulted in our Group reporting significantly better results for the quarter under review, vis-a-vis last year corresponding quarter as well as the immediate preceding quarter.

Thank you

BursaGemAnalysis Team

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# TASCO CLIENT

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