Complete Logistics Services (CLS), a Klang-based company, provides comprehensive logistics solutions including custom clearing and bonded warehousing logistics in the Nilai Inland Port. It also has a shipping business and owns a fleet of eight ships and over 200 trucks.

CLS has, in the past, reacted swiftly to changing operating environment. For instance, its shifted focus to land logistics from shipping and trading when industry fundamentals in the latter deteriorated. This proved a good call – recent growth is driven by logistics segment, where turnover doubled over the past four years to RM93.7 million and accounted for roughly 80% of total revenue in FYMar2014. 

1H2015 revenue increased y-y by 5.3%, underpinned by continued growth in logistics. Stripping out the RM3.67 million one-off gain on bargain purchase in 1Q14, normalised earnings declined marginally by 1.8% to RM5.86 million. This was due, primarily, to loss on disposal of vessel, in a continued effort to clean up its balance sheet. 

Recall that CLS made a RM18.6 million impairment loss on its ships in FY2012, given the prolonged oversupply of vessels in the industry. 

Going forward, lower fuel prices should boost margins and earnings. Elsewhere, it is acquiring land in Klang for RM13.4 million to expand warehousing activities to the West Port area. The company is also in process of disposing a subsidiary, which will result in one-off gain of RM1.5 million.

CLS has a strong Fundamental score of 2.5/3. Balance sheet is healthy with net gearing of just 0.04%. 

It scores a 1.8/3  for Valuation. The stock is trading at a trailing 12-month P/E of 9.0 times and 0.9 times book value of 91 sen. CLS declared interim dividend of 3 sen per share in 1Q2015, translating into net yield of 3.8%.

This article first appeared in The Edge Financial Daily, on January 23, 2015.