Tasco Bhd - Below Forecasts

Date: 
2013-02-22
Firm: 
OSK
Stock: 
TASCO
Price Target: 
2.10
Price Call: 
HOLD
Last Price: 
0.85
Upside/Downside: 
+1.25 (147.06%)

Tasco's FY12 earnings of  RM28.9m were softer than  expected,  accounting  for  only 81.4% of our projections. We believe the lacklustre performance was mainly due to the  sluggish  global  economy,  which  affected  export  volume.  FY13  would  still  be  a challenging year for Tasco due to the weak global macroconomic outlook as well as the domestic political uncertainty. We are lowering Tasco's FY13f earnings to derive a new RM2.10 FV based on 7x FY13 PER. Downgrade to NEUTRAL.   
 
Below  expectations.  Tasco's FY12 earnings of RM29.0m were  below  our  and  street estimates.  The  FY12  revenue  of  RM442.4m  represented  a  5.7%  drop  from  FY11.  Its international  Business  Solutions  (IBS)  unit  posted  a  14%,  or  RM26.8m,  drop  in  revenue while  its  Domestic  Business  Solutions  (DBS)  unit  managed  to  maintain  revenue  at  the FY11 level of RM276m. Other key highlights are:
  • On a YTD basis, revenue from Contract Logistics, its largest revenue contributor,contracted by 5.1% y-o-y due to a weaker performance in its customs clearance and warehouse business segment.

  • Its  International  Air  Freight  division  recorded  a  18.3%  y-o-y  decline  in  revenuedue  to  lower  export  shipments  by  major  customers  in  the  manufacturing  sector amidst a gloomy global economic outlook.

  • Nevertheless,  the  group's  International  Sea  Freight  and  Domestic  Truckingdivisions  still  managed  to  achieve  7.8%  y-o-y  and  15.7%  y-o-y  growth respectively,  which  somewhat  mitigated  the  impact  from  the  decline  in  the Contract Logistics and International Air Freight divisions.

Downgrade  to  NEUTRAL,  with  RM2.10  FV.  The  challenging  environment  facing  Tasco prompts us to trim our FY13F earnings estimate by 17% to arrive at a lower FV of RM2.10, based  on  a  7x  FY13  PER.  As  our  FV  provides  a  less  than 10%  potential  upside,  we  are downgrading Tasco to NEUTRAL.
Source: OSK
Discussions
Be the first to like this. Showing 1 of 1 comments

kianlim2004

The osk's assessment only look at the money figure side which
is useless. You want to invest in a company when the economy is
not in its favor but the company has fundamental characteristics
that will help the company to do well when the economy recovers
which is something for sure to happen due to very low interest
rate. Its assessment should cover the key strength of the company
such as the company requires very low capital expenditure to maintain its business, has very global extensive network supported by its Japanese parent company, and it has a solid balance sheet that shows that management has a long track record
of delivering value to its shareholders. Common, if you look through the annual reports of this company, you can tell that
the management and employees are good people working very hard
to provide good service to the public. I would recommend to anyone to buy this stock because this is a good company that
makes improvement everyone for the last few years even though
its share price is not that cheap compare to 5 years ago when
it is only RM$0.60 per share.

2013-04-14 13:42

Post a Comment