PETALING JAYA: Swift Haulage Bhd is looking to expand its customer base domestically and regionally, following the expansion and extension of its warehouse capacity.

       According to Kenanga Research, the integrated logistics provider group will enjoy an overall increase of 46% to its warehouse capacity in its financial year 2022 upon completion of its warehouse expansion as well as extension.

       The group have completed its warehouse extension of 200,000 sq ft in Tebrau, Johor, and 109,000 sq ft extension in Seberang Perai, Penang, during the first half of its financial year 2022 while a 178,000 sq ft new warehouse in Port Klang Free Zone, Selangor, is scheduled to be completed in the third quarter of its financial year 2022, according to Kenanga Research.

       “Warehouse and container depot expansions and prime mover additions have enabled Swift Haulage to tap into the post-Covid recovery demand and healthy external trade growth,” Kenanga Research said.

       Kenanga Research is positive on the group due to robust growth potential, driven by higher demand for its container haulage, land transportation and expansion of warehouse.

       In addition, the research house noted the group’s strong pre-tax margin of 10%, which is higher than the industry’s average of around 4%, attributed to the group’s integrated offerings with cost and service advantages from in-house supporting services.

       Kenanga Research said the group’s net gearing would improve owing to the expected utilisation of initial public offering proceeds to repay borrowings.

       Meanwhile, MIDF Research said the expansion of the group’s warehouse capacity will support its near-term growth in earnings.

       MIDF research noted the expansion of warehouse capacity would subsequently give a cross-selling opportunities with the addition of new prime movers to its existing fleet of vehicle.

       Kenanga Research and MIDF Research maintained their “outperform” and “buy” calls with a target price of RM1.01 per share and RM1.18 per share, respectively.

       Kenanga Research noted the downside risks to its call to be lower-than-expected sales and margin as well as delay in the group’s primary warehousing expansion plan.