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XINHWA (5267) XIN HWA HOLDINGS BHD - A Potential Forward PER at 1X? (Under Discovered Gem in EMS, after VS, SKPRES and ATAIMS?)

1. Introduction
An Integrated Logistics Services Provider in Malaysia, Singapore, and Indonesia
XINHWA  is an integrated logistics service provider involved in land transport operations, warehousing and distribution operations and other services. Their land transport operations incorporate cargo transportation services and container haulage services whereas other services incorporate freight forwarding and customs brokerage services as well as manufacturing and fabrication of trailers.

Source: Xin Hwa Annual Report 2019
Xin Hwa has ventured into the e-commerce business-to-business segment in 2019, where global e-commerce has been doing exceptionally well due to Covid-19.
2. Eyeing Contracts from Indonesia
Group is optimistic about performing better in the FY20, with a target to achieve double-digit growth in top line, while bottom line is also expected to be positive.
3. Strong Demand for Warehousing Space, even Before Covid-19
New Warehouse in Shah Alam will be Completed end of 2020, bringing Xin Hwa’s warehousing space close to 1 million square feet.
In 2019, Xin Hwa operates 4 warehouses in Johor with a total warehousing space of 654,000 square feet:-
New Warehouse in Shah Alam will be Completed end of 2020, bringing Xin Hwa’s warehousing space close to 1 million square feet.
The construction for our E-Fulfilment Centre in Shah Alam is underway with completion slated for 2020. The centre comprises a 7-storey office and a 3-storey warehouse. Upon completion, this would add an approximately another 300,000 square feet of warehousing space, and thus, bringing Xin Hwa’s warehousing space close to 1 million square feet.
Source: Xin Hwa Annual Report 2019
4. One of the Top EMS Players is Xin Hwa’s Existing Client?
Malaysian EMS Players benefited from US-China trade war, and now, Demand for Warehouse Surges further after Covid-19.
5. XinHwa, with Strong Demand in Warehousing, A Potential Beneficiary for Electronics Manufacturing Services (EMS) Market Size exceeded USD 500 billion?
6. Valuation of Xin Hwa, against its EMS-related Peers
7. Appendices
This writing is based on my own assumptions and estimations. It is strictly for sharing purpose, not a buy or sell call of the company and the contents of this report should not be considered as professional financial investment advises or buy/sell recommendations. I strongly encourage you to do your own research and take independent financial advice from a professional before you proceed to invest.
I make no representations as to the accuracy, completeness, correctness, suitability, or validity of any information on my report and will not be liable for any errors, omissions, or delay in this information or any losses and damages arising from its display or usage. All users should read the posts and analysis the information at their own risk and we shall not be held liable for any losses and damages.

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