The research house also lowered the integrated logistics company’s target price (TP) to 52 sen from 65 sen previously.

In a statement, it said that after adjusting assumptions to align with the group’s operating statistics and lower margins for the cumulative nine months ended Sept 30, 2023 (9M FY2023), its earnings forecasts were revised by 34% for FY2023, 19% for FY2024, and 18% for FY2025.

“With a year-to-date increase of 17%, the recent share price rise prompted a downgrade of our recommendation to ‘neutral’,” said MIDF.

Meanwhile, Swift Haulage’s net profit almost doubled to RM28.39 million in the third quarter ended Sept 30, 2023 (Q3 FY2023), from RM11.72 million a year earlier.

The holding company’s Q3 FY2023 revenue increased by 5.52% to RM168.04 million from RM159.25 million.

The growth was due to the contribution of all its business segments, mainly from container haulage and land transportation segments.

However, MIDF said that the container traffic segment dropped further in Q3 FY2023.

“Malaysia’s exports and imports experienced a steeper decline of 15.2% year-on-year (y-o-y), along with a 16.3% y-o-y drop in imports, as compared to the second quarter ended Sept 30, 2022 (Q2 FY2023),” MIDF said.

It added that there is a notable decrease in freight forwarding revenue, compared to container haulage (despite its correlation).

“This was partially attributed to lower freight rates and a 6% y-o-y decline in Johor port throughput, a focal point of its freight forwarding business,” it stated.

MIDF noted that the volume of land transportation trips segment remained robust due to recent fleet expansion.

“The management anticipates this segment to receive a further boost in the coming year.

“This is due to the activities at the Pengerang Integrated Complex pick-up, with the expected occupancy of the warehouse they operate to increase from 50% to 80%,” it said.

The research firm also noted that the average warehouse utilisation rate declined to 71% (Q2 FY2023: 72%), with the Tebrau warehouse at 45% occupancy.

However, the joining of a new energy drink customer in October 2023 is expected to increase it to 70% by year-end, while the occupancy rate of the Port Klang Free Zone warehouse remained at 30%.

Moving forward, it said that Swift Haulage aims to enhance its capacity (378,000 sq ft) by the first quarter of 2024 (Q1 FY2024).

“It will be done with the acquisition of a new warehouse in Perai and the Westport warehouse, which the logistics company is constructing, and already has an existing electrical and electronics (E&E) customer prepared to utilise 70% of the space.

“As for the container depot segment, utilisation remains high at 87% in Q3 FY2023 due to containers being off-hired by shipping lines,” it said.

As of 12.28pm, Swift Haulage’s share price was down by two sen or 3.54% at 54 sen, giving it a market capitalisation of RM484.96 million.