KUALA LUMPUR (Sept 12): Freight Management Holdings Bhd fell as much as 3%, albeit on thin trade, after the logistics firm said regulators planned to suspend its haulage licence.
Shares of Freight Management, which fell as much as five to RM1.67, erased losses to trade flat at RM1.72 at 3.58pm. A total of 65,300 shares changed hands.
For comparison, the FBM KLCI fell 3.55 points or 0.2% to 1,862.56.
Yesterday, Freight Management said its subsidiary FM Global Logistics (M) Sdn Bhd had received a notice from the Land Public Transport Commission(SPAD))on a possible licence suspension starting this September 24.
Freight Management said it was "trying to contact the relevant officers of SPAD for further information and clarification while assessing the implications and/or impact of the notice on the company."
Analysts are maintaining their forecast for Freight Management as they await more details on the planned suspension.
In a note today, RHB Research Institute Sdn Bhd said it was maintaining its "neutral" call on Freight Management shares pending further information.
Haulage constitutes eight per cent of Freight Management's gross profit, said RHB, which retained its target price for Freight Management shares at RM1.76. RHB also maintained its income forecast for Freight Management.
"In the worst-case scenario, the suspension will drag its FY15F/16F net profit by 8%-10%, but we think that Freight Management will likely strategise to mitigate such an impact.
"The division will not run into losses as Freight Management is still able to outsource the haulage services to other party," RHB said.