Tasco’s FY13 net profit of MYR25.4m came in stronger than expected. Despite  a  strong  recovery  in  2HFY14,  its  sub-par  performance  in  1H dragged  FY13  earnings  lower  by  12.3%  y-o-y.  In  4QFY13,  all  its business  divisions  reported  healthy  results  in  tandem  with  the  global economic recovery and a pickup in world trade. We make no changes to our earnings forecasts. Maintain BUY and a MYR2.30 FV.

• FY13 results  beat  expectations.  Tasco Malaysia (Tasco)  posted  solid 4QFY13  results,  bringing  its FY13  total  net  profit  to  MYR25.3m,  about MYR4m above our expectations.  For FY13, revenue grew 0.2% y-o-y to MYR443.5m from MYR442.4m. Nonetheless, due to a weak start  in  1H, Tasco’s  FY13  earnings  slipped  12.3%  y-o-y  to  MYR25.4m,  from MYR28.9m in FY12.
• Operations  overview.  In  4QFY13,  Tasco’s  business  divisions  saw overall  improvements  in  revenue  and  earnings.  Under  its  domestic business solutions unit,  the  contract  logistics  division  reported revenue and pre-tax profit  growth of 2.8% and 0.1% q-o-q respectively. This was attributed  to  an  increase  in  the  customs  clearance,  haulage  and warehouse business  volume.  Furthermore, its trucking  division  posted  a revenue  increase  of  MYR2.8m  (14.3%  q-o-q)  and  a  pre-tax  profit  of MYR0.7m,  driven by  higher export  shipments  to  intra-Asean  region.  In the  international  business  solutions  unit,  all  business  units  reported stronger revenue and pre-tax profit due to improved trading activities.
• Maintain  BUY;  MYR2.30  FV.  We  continue  to  believe  that  Tasco’s outlook remains  positive,  in tandem with the  global economic recovery. There  are  no  changes  to  our  earnings  expectations.  We  estimate  the company’s FY14 net profit  at MYR28m, up  11.3%  y-o-y.  Maintain BUY and  a  MYR2.30  FV,  pegged to  an  8x FY14F P/E, which is its historical average P/E.

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SWOT Analysis

Company Profile
Tasco Malaysia (Tasco) is a leading third-party logistics provider.

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Source: RHB