The group has offered RM19.1 million cash for an additional 17.5% stake in logistics firm GVL, the leaseholder of a land measuring 70.9 acres in Shah Alam, Selangor, to be developed into a six million square feet (sq ft) green logistics hub by 2028, making it the largest in Asia outside of China.
“We are positive on the latest development that strengthens Swift’s presence in the booming e-commerce sector,” Kenanga said in a note yesterday.
The proposed acquisition would raise the transportation and logistics company’s ownership of GVL from 25% to 42.5%. The proposed acquisition is expected to be completed by the second half of the year (H2 CY23).
The vendor of the stake is partner Aspen Vision Properties Sdn Bhd, which will see its stake in GVL reduced from 30% to 12.5%.
“Our calculations show that the acquisition will enhance Swift’s forecasted FY2026 earnings by 3%-4% with a slight increase in net gearing from 0.91 times to a still manageable 0.94 times,” it added.
The investment bank believes the acquisition will help Swift strengthen its presence by providing a one-stop centre for well-known brands such as Watsons, Shopee, Lazada, Zalora.
Swift is a transportation and logistics company operating e-fulfilment services, automotive warehousing and a trucking arm with more than 1,500 prime movers. It commands a leading 10% share in the haulage market.
Green logistics hub project
GVL’s Shah Alam International Logistics Hub will house approximately six million sq ft of warehouse space to be developed in phases. It will be the first green-certified logistics hub in the country and one of the largest in Asean.
The whopping RM1.3 billion development cost will be funded with an Asean Green SRI Sukuk, with a nominal value of up to RM1.5 billion, said Kenanga.
“The further increase of shareholding interest in GVL presents an opportunity for the group to continue expanding its exposure in Malaysia’s warehousing industry,” said Swift in a Bursa filing on March 24.
The first phase of the development entails 2.8 million sq ft, worth RM700 million, to be completed by May 2025.
Kenanga notes online listings show comparable land in the surrounding areas have asking prices ranging between RM109 and RM149 per sq ft (psf).
Meanwhile, independent valuer Knight Frank Malaysia Sdn Bhd values the land in its entirety at RM495 million or RM159 psf.
“We believe Swift is getting a reasonably good deal that values the land at RM100 psf,” said Kenanga, which maintained its ‘outperform’ call with a target price of RM1, pending the completion of the deal.
Swift posted a net profit of RM50.5 million for the financial year ended Dec 31, 2022, up from RM47.1 million in FY2021.
At 10.29am today, Swift’s share price was down half-a-sen at 47 sen, giving it a market capitalisation of RM413.85 million.