Listed in January 2004, Harbour-Link Group (Harbour) has established its track record as a leading shipping, marine and integrated logistics provider locally and regionally. Harbour’s revenue is primarily contributed from four divisions namely: 1) shipping and marine services; 2) integrated logistics; 3) engineering works, and 4) property development. Overall, the shipping & marine services and integrated logistic divisions contribute about 85% of the group revenue.

After 24% of correction from its 52-weeks high of RM1.17 to RM0.89 yesterday, Harbour is trading at an undemanding 9.1x trailing P/E (18% and 43% discounts against 10-year average and its peer average P/E) and 21% below its NTA of RM1.12.

Going forward, the group is cautiously optimistic of its shipping and marine division underpinned by strong domestic consumer demands and the modest increase of freight rates. Interestingly, the world container index (Figure 1) had risen 106% YTD, which would potentially boost the group shipping and marine services division bottomline.

Technically, the stock is grossly oversold and building a sound base near RM0.85 - 0.895 level. Any weakness is a good opportunity to accumulate (RM0.85-0.895) supported by bottoming up indicators. A strong breakout above 0.95 resistance will spur prices higher towards the next upside objective at RM1.00-1.10.

Source: Hong Leong Investment Bank Research - 5 Aug 2021