Tasco Bhd
Tasco is a logistics player offering logistics solutions covering air, sea and land transportation, for both domestic and international shipments. The company has been established since 1974 and was formerly known as Trans-Asia Shipping Corp. It has 25 logistics centres with over 1,500 employees in Malaysia.

Currently, Tasco derives 40-50% of its revenue from the contract logistic division which involves activities such as warehousing services and haulage transportation. Moving forward, future earnings growth will likely be underpinned by the company’s expansion into the e-commerce segment.

Indeed, over the longer run, e-commerce is expected to overtake the traditional brick-and-mortar retailing business model. With this secular trend change in the logistic industry, retail companies would demand more sophisticated distribution and warehousing systems from domestic logistic companies.

Tasco posted a 26.5% rise in revenue to RM559.6 million for FY March 2014 while net profit was up 5.2% to RM30.4 million. For 1H2015, revenue rose 15.8% to RM257.4 million while net profit surged 42.8% to RM18.1 million. The company has consistently chalked up double-digit ROE for the past three years.

Tasco has a solid balance sheet with net cash of RM13.8 million as at end-September 2014. The company paid dividends of 9.01 sen in FY2014 which translates into a yield of 3.48% at current market price of RM2.59.

The stock is currently trading at a price-to-book ratio of 0.9 times and a trailing 12-month P/E ratio of 8.3 times. Tasco’s valuations are cheaper than its peers. Freight Management Holdings Bhd is trading at a price-to-book ratio of 1.6 and a trailing 12-month P/E of 11.9 times while Century Logistics Holding Bhd is trading at price-to-book ratio of 0.9 and trailing 12-month P/E of 8.7 times.

This article first appeared in The Edge Financial Daily, on December 31, 2014.