TASCO BHD - Retracement in progress.TASCO BHD - Retracement
Currently in retracement of a bullish trend. Possibly WXY. Stay sideways until we see a bullish trend continuation. If one wants to invest for the long term, it's good to buy at wave Y.
On fundamental:
TASCO Berhad (Bursa Malaysia: TASCO), the logistics and warehousing services provider. As of recent reports, here’s what’s happening with TASCO:
Anticipated Recovery in Trade Activities:
TASCO is expected to exhibit a tale of two halves in its financial year ending March 31, 2024 (FY24). The first half of 2023 was somewhat lackluster due to seasonal factors and slower trade activities. However, the second half of 2023 is anticipated to be robust, riding on the recovery in trade.
Encouragingly, shipment volumes saw upticks in June and July, signaling positive momentum.
New Warehouses and Tax Incentives:
TASCO’s optimistic outlook is supported by contributions from its new warehouses. The construction of its 600,000 sq ft four-storey Shah Alam logistics center is on track, with rental space expected to be handed over to electrical and electronics as well as retail customers in 4Q24.
Additionally, TASCO’s 250,000 sq ft Westport logistics center expansion is set to be completed by November. This expansion is expected to generate around RM20 million in rental income per annum (excluding other services).
Financial Outlook and Valuation:
RHB Research maintains a “buy” call on TASCO, with a revised target price of RM1.70 (compared to RM1.83 previously). The downward revision in the FY24 earnings forecast accounts for a normalizing freight market.
TASCO’s valuation at 6.9 times the price-earnings ratio (P/E) is below the local and regional peer average, making it an attractive investment proposition. The company has consistently delivered earnings and generated cash flow.
In summary, TASCO is poised for a stronger performance in the latter part of 2023, benefiting from trade recovery, new warehouses, and favorable tax incentives. Keep an eye on their progress as they continue to expand and adapt to market dynamics.
