RM2.95 Fair value: RM3.60 Stock Code: 2062
INVESTMENT HIGHLIGHTS
• Harbour-Link Group (Harbour Link) is a dominant logistics provider in East Malaysia with >50% market share. Harbour-Link rides on the rise of economic activities in Sarawak, underpinned by the Sarawak Corridor of Renewable Energy (SCORE) initiative.
• Logistics services and machineries, its key earnings driver, contributed >60% to Harbour-Link’s earnings growth in FY15. The division rides on the construction of the RM1.8b Samalaju Industrial Park, which is now 40% complete and scheduled to be completed by 2017.
•
Harbour-Link’s maiden expansion into the property sector will bear
fruit in FY16. Phase 1 and Phase 2 of the Kidurong Gateway will be
completed by end-FY15. The group is also aiming to launch Phase 3 in
FY16 with an estimated GDV of RM70m. • Consensus is projecting a 53% and 23% earnings growth in FY15F and FY16F driven by the group’s logistics division. On top of this, earnings from the property division are expected to kick in, in FY16, upon the completion of construction.
• Harbour-Link is now in net cash position, suggesting room for higher dividends or acquisitive growth.
VALUATION
• We value Harbour Link at a Sum-of-Parts derived fair value of RM3.60/share.
by MIDF Research 12/01/16
HARBOUR LINK GROUP BHD
The principal activities of the Company are provision of management services and investment holding. The principal activities of subsidiaries are shippingand forwarding servicesmulti discipline engineering and procurement.
