TNLOGIS (8397) - Stocks With Momentum: Tiong Nam Logistics Holdings Bhd
Tiong Nam Logistics Holdings Bhd
WITH 36 years of experience in the logistics industry, Tiong Nam Logistics Berhad (Fundamental: 1.3/3; Valuation: 1.8/3) has expanded from a small scale cargo business to a total logistics provider. Its range of services include customs forwarding, cold room facilities, express delivery, as well as crane and forklift rental.
Tiong Nam’s share price have been on the uptrend since the beginning of the week, with the stock rising 13.7% since Monday while volume increased over ten-folds. Just yesterday, the stock rose 3.13% to close at RM1.32, possibly encouraged by the slump in oil prices, which translates into lower fuel costs for logistics players.
Recently in FY2014, the company diversified into property development with projects such as Tiong Nam Industrial Park 2 in Shah Alam and Tiong Nam Business Park located in Nusajaya, Johor.
Tiong Nam has enjoyed steadily rising turnover from FY March 2010 to FY2013, with sterling performance in FY2014 when its revenue leapt 56.8% to RM 533 million, driven largely by the property development segment which grew six times from RM152 million to RM178 million.
Property has since surpassed its core logistics business to be the largest operating segment. Profits too, have grown as a result, with net profit increasing from RM11.6 mil in FY2010 to RM74.6 mil in FY2010. Meanwhile, net profit margins rose to 14% as of FY2014 from 5% the previous year.
While Tiong Nam’s profits have grown substantially, investors should also note that the recent high contributions from property may create earnings sustainability issues during a property down-cycle. Also, gearing is relatively high at 80%, although down from 99% in FY2013. Nonetheless, investors can take comfort from its high interest cover of 7.8 times.
Tiong Nam is trading at a trailing 12-month P/E multiple of 7 times, and at 1.25 times book.
This article first appeared in The Edge Financial Daily, on January 23, 2015.
http://www.theedgemarkets.com
WITH 36 years of experience in the logistics industry, Tiong Nam Logistics Berhad (Fundamental: 1.3/3; Valuation: 1.8/3) has expanded from a small scale cargo business to a total logistics provider. Its range of services include customs forwarding, cold room facilities, express delivery, as well as crane and forklift rental.
Tiong Nam’s share price have been on the uptrend since the beginning of the week, with the stock rising 13.7% since Monday while volume increased over ten-folds. Just yesterday, the stock rose 3.13% to close at RM1.32, possibly encouraged by the slump in oil prices, which translates into lower fuel costs for logistics players.
Recently in FY2014, the company diversified into property development with projects such as Tiong Nam Industrial Park 2 in Shah Alam and Tiong Nam Business Park located in Nusajaya, Johor.
Tiong Nam has enjoyed steadily rising turnover from FY March 2010 to FY2013, with sterling performance in FY2014 when its revenue leapt 56.8% to RM 533 million, driven largely by the property development segment which grew six times from RM152 million to RM178 million.
Property has since surpassed its core logistics business to be the largest operating segment. Profits too, have grown as a result, with net profit increasing from RM11.6 mil in FY2010 to RM74.6 mil in FY2010. Meanwhile, net profit margins rose to 14% as of FY2014 from 5% the previous year.
While Tiong Nam’s profits have grown substantially, investors should also note that the recent high contributions from property may create earnings sustainability issues during a property down-cycle. Also, gearing is relatively high at 80%, although down from 99% in FY2013. Nonetheless, investors can take comfort from its high interest cover of 7.8 times.
Tiong Nam is trading at a trailing 12-month P/E multiple of 7 times, and at 1.25 times book.
This article first appeared in The Edge Financial Daily, on January 23, 2015.
http://www.theedgemarkets.com
