• Overview. Swift Haulage Berhad (Swift) 4Q22 revenue increased by 3.7%  QoQ and 4.9% YoY mainly driven by full economic reopening which  translated into higher business activities in all segments. This was further  aided by seasonal festive periods. PATAMI dropped by 17% YoY however  due higher effective tax rate.

• Key highlights. Segment wise, Land transportation revenue increased by  10% QoQ and 16% YoY due to the expansion of prime mover fleet.  Warehousing and container depot segment contribution also expanded  following 13% QoQ and 10% YoY jump on the back of growing capacity in their warehouse footprint.

• Against estimates: Below. FY22 PATAMI of RM50.5mn came in below our/  consensus full year forecast at 92%/94%. The deviation against our  estimate was mostly due to higher-than-expected effective tax. Swift’s PBT  of RM64mn was in-line with our forecast at 96%.

• Dividend. Declared a 2 nd interim DPS of 1.0 sen, bringing YTD DPS to 2.0 sen, equivalent to a payout of 35%. This translates into a yield of 4.2%.

• Outlook. Swift’s FY23 earnings outlook will be lifted by a recovery in  domestic economic activity supported by expansion plan i.e., addition of  30 new prime movers and ongoing warehouse expansion. Swift’s total  warehouse capacity is projected to grow by c.30.7% in FY23 to be  supported by 2 additional warehouses at Mak Mandin, Penang (150,000 sq  ft) and Pulau Indah, Selangor (250,000 sq ft). Long-term growth remains  intact on the back of Global Vision Logistics (GVL) one-stop logistics,  warehousing and e-commerce hub (first phase completion expected in 2H2024).

• Our call. Maintain our forecast at this juncture and reiterate our BUY call  on Swift with a TP of RM0.71, pegged at 10x PER to 7.1 sen FY23 EPS. We  continue to like Swift due to it is a dominant player in the haulage business  (10% of Malaysia market share), above peers and industry average profit  margins as well as its strong drive to implement the ESG initiatives.

Source: BIMB Securities Research - 28 Feb 2023