PETALING JAYA: Sin-Kung Logistics Bhd is expected to ride on the global air cargo volume demand to accelerate its growth.
The ACE Market-bound company, which is set to list on May 15, is influenced by the demand for air cargo volume for its airport-to-airport logistics services.
It specialises in providing airport-to-airport road feeder services for both passenger and cargo airlines.
Despite some hiccups from geopolitical tensions, DHL’s tracking showed global air cargo volume demand had recorded seven consecutive months of year-on-year growth.
According to Hong Leong Investment Bank Research (HLIB Research), Sin-Kung’s earnings could record a strong financial year 2023 (FY23) to FY25 compounded annual growth rate (CAGR) of 39.9%.
In a non-rated report, it valued the company at 17 sen, based on a 15 times price to earnings ratio on FY24 forecast earnings per share of 1.1 sen.
“With a fleet of 461 commercial vehicles as of FY23, Sin-Kung’s revenue is predominantly derived from airport-to-airport road feeder services, constituting 52% of the group’s earnings.
“This segment involves the transportation of export and import cargo between key airports, including Kuala Lumpur International Airport, Subang Airport, Penang International Airport, and Singapore Changi Airport,” it said.
Revenue is also generated from point-to-point trucking services of 20.3%, warehousing and distribution at 15.7%, container haulage at 9.5%, and other services of 2.5%, it said.
It noted the primary clientele of Sin-Kung comprises cargo airlines, passenger airlines, and general sales agents, collectively contributing to 91% of the group’s total revenue.
“The recent disruption in major sea routes have sparked an increase in demand for air freight,” it said.