COMPLETE LOGISTIC SERVICES BHD
COMPLETE Logistic (Fundamental: 2.1/3, Valuation: 1.4/3) provides a range of shipping, land transportation and warehousing logistics services. The company is rapidly expanding its land logistics business and is one of the beneficiaries of the fall in crude oil prices. 

The effects of lower fuel costs can be seen in its latest quarterly results. For 3QFYMar15, net profit rose 28.7% y-o-y to RM4.1 million and net profit margin increased by 2.1 percentage points to 12.5%. Similarly, net profit for 3Q15 surged 79.3% q-o-q to RM4.1 million on a 5.2 percentage point expansion in net margin. 

While the outlook for the next quarter looks challenging due to festive holidays which may affect sales volume, its long-term prospects remain intact with its rapid development of its land logistics capabilities. In addition to truck fleet expansion, it is acquiring two parcels of industrial land for RM13.4 million to expand its warehousing activities to the West Port area.

The jewel in its crown is the Nilai Inland Port, which contributes 30–40% of revenue. It taps on Nilai’s growing industrial base and provides convenient clearing and bonded warehousing logistics. It also owns a fleet of eight ships and over 200 trucks.

The company has, in the past, reacted swiftly to changing operating environment. For instance, its shifted focus to land logistics from shipping and trading when industry fundamentals in the latter deteriorated. This proved a good call – recent growth is driven by logistics segment, where turnover doubled over the past four years to RM93.7 million and accounted for 77.7% of revenue in FY2014. 

Its balance sheet is healthy with net gearing ratio of just 3.8%. The stock is trading at a trailing 12-month P/E of 10.6 times and 1.08 times book value. It paid an interim dividend of 3 sen per share last October, giving a yield of 3.1%.

This article first appeared in The Edge Financial Daily, on May 19, 2015.