KUALA LUMPUR: Freight Management Holding Bhd (FMH) could incur capital expenditure (capex) of up to RM150mil to develop an integrated logistics hub on its newly acquired land.

       CGS-CIMB Research, in its latest report, said the hub would comprise e-commerce fulfillment and parcel delivery services.

       “This will allow FMH to expand its third party logistics warehousing and distribution services as it is witnessing strong demand, with current utilisation rate at 90% and 95% for its existing warehouses.

       “We estimate that FMH will likely incur total capex of RM130mil to RM150mil for this project, inclusive of land cost of RM56.8mil across a two-to-three-year period,” the research house said.

       As FMH has net gearing of 0.15-times, CGS-CIMB said the company is likely to fund the project via borrowings and internally generated funds.

       FMH has announced that its wholly-owned subsidiary, FM Global Logistics (M) Sdn Bhd, had entered into a sale and purchase agreement with Cebur Megah Development Sdn Bhd.

       The deal will see the group acquiring two parcels of freehold land measuring 9.32 acres in Klang, Selangor.

       As the ultimate holding company of the vendor is Boustead Properties Bhd, the sales and purchase agreement is conditional upon approval from the Economic Planning Unit.

       According CGS-CIMB, the purchase consideration of RM56.8mil is based on the market value appraised by an independent valuer.

       “According to the certification of valuation dated July 12, 2021, the total value of the parcels stood at RM56.9mil, which is on par with the purchase consideration,” the research house said.