2021-08-23 03:22:02
Technical tracker - HLIB Retail Research – 23 Aug 2021TNLOGIS (RM0.875-Not rated) – Maintaining its pole position in logistics & warehousing; Bullish downtrend line breakout
TNLOGIS offers full-fledged logistics and warehousing services. The group is supported by an extensive logistics and warehousing network (contribute the lion’s share of its earnings) in Southeast Asia, with 90 warehouses and distribution centres across Malaysia, Thailand, Singapore, Myanmar, and Laos. The group has also ventured into the property development and hospitality businesses.
Riding on the promising outlook in the logistics and warehousing amid the pandemic-driven e-commerce and digital transformation boom, TNLOGIS is investing to increase its warehousing capacity by 22% to 7.3m sqft from ~6m sqft as at 31 Mar 21, underpinned by an upcoming 225k sqft warehousing by 1Q2022 in Seelong, Senai and another 1.1m sqft warehouse at Senai Airport by 1Q2023. Meanwhile, the group’s diversified clientele comprises major domestic and world-renowned brands, including the F&B, O&G, E&E, IT, etc will mitigate the vagaries of any one sector.
After sliding 20% from 52-week high of RM1.10, TNLOGIS’s risk-reward profile is turning attractive again amid undemanding valuation at 14.9x FY23E P/E (49% lower than peers), as earnings upcycle (after a sluggish FY19-20) is expected to jump 64% EPS CAGR from FY21-23 premised on a buoyant logistics and warehousing services outlook, divestment of a majority stake in its loss-making hospitality business to realign its focus to more earnings accretive business and improving its balance sheet. Downside risk is limited, as its P/BV of 0.6x (vs 10Y average 0.8x) has substantially undermined the value of its income-generating warehouses, which can be monetised or “REIT” in the future.
We believe the buying interest for the stock may have returned following a bullish downtrend line breakout (from RM1.10 high in Dec 2020), underpinned by a strong reclaim above multiple key SMAs and bottoming up indicators. A strong breakout above RM0.915 (15 June high) will spur the price towards RM0.96-1.02-1.10 zones. Key collection range is RM0.84-0.88 levels. Cut loss at RM0.82.
Collection range: RM0.84-0.85-0.88
Upside targets: RM0.915-0.96-1.02
Cut: RM0.82
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