Technical tracker - HLIB Retail Research – 25 May 2022 SWIFT: | HLeBroking

Technical tracker - HLIB Retail Research – 25 May 2022

SWIFT: A proxy of economic recovery

Integrated logistic solution provider. Listed on the Main market in Dec 2021, SWIFT is an integrated logistic solution provider, encompassing container haulage, land transportation, warehousing and container depot, and freight forwarding services. SWIFT is ranked as the top hauler in all major ports in Peninsular Malaysia in terms of twenty-foot equivalent unit volume. It commands a 7.1% market share as of 1Q22 in Port Klang (the busiest port in Malaysia and ranked 13th busiest port in the world). In FY21, container haulage and land transportation accounted for 76% of the group revenue.

New capacity from warehouse segment. The warehouse space demand has been on an uptrend as companies race to stockpile goods to hedge against the supply chain bottleneck. In tandem with the economic recovery, Malaysia's total trade value and IPI index – a proxy to gauge warehouse needs – has grown steadily over the past few months, indicating a healthy warehouse demand outlook. Hence, we reckon SWIFT's new capacity from the warehouse segment is likely to be well-sought after, riding on the strong demand for warehouses.

To recap, SWIFT is in the midst of expanding its warehouses capacity by another 46% ín Tebrau, Seberang Perai and Port Klang. As of the date of writing, the Tebrau and Seberang Perai warehouses have been completed and already commenced operations while the Port Klang’s expansion is slated to be completed in 3QFY22.

Undemanding valuation. After plummeting 39% from a 52-week high of RM1.13 to RM0.68 (below the IPO price of RM 1.03), we reckon the risk-reward ratio has turned attractive, supported by undemanding 9.4x FY23 P/E (57% and 9% discount against KLTRANS’s 5-year average of 22x and peers average of 10.2x, respectively). Judging from the group’s leading position in container haulage space and its superior margin, we believe SWIFT’s current valuation is undemanding.

Grossly oversold. Technically, SWIFT is trading above strong support area of RM0.66-0.67, with indicators showing grossly oversold positions. Near term sideways pattern may prevail until a successful breakout above RM0.71 hurdle, lifting SWIFT towards RM0.75-0.81-0.86. Cut loss at RM0.62.

Collection range: RM0.65-0.66-0.675

Upside targets: RM0.75-0.81-0.86

Cut: RM0.61


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