TASCO - A STILL LOWLY VALUE COMPANY

TASCO BHD (formerly TRANS-ASIA SHIPPING CORP BHD)

Primary Symbol & Exchange: TASCO
5140 - Ordinary Shares - Malaysian Stock Exchange

Price/share @ 1/11/2010 RM:1.35
Mkt Cap RM’m : 135.00
Shares (m): 100.00
Par RM: 1.00

SECTOR CLASSIFICATION
MSEB: Trading/Services
Fox Capital: Transport-Logistic

Executive Chairman: Tan Sri Datuk Asmat bin Kamaludin
Managing Director: Lee Check Poh

KNOWN MAJOR SHAREHOLDER(S) (as at 14/04/2010)
Nippon Yusen Kabushiki Kaisha (direct & indirect interest) 61.32%
Tan Sri Datuk Asmat bin Kamaludin 37.23%
Lee Check Poh 9.83%



BACKGROUND

Tasco Berhad (TASCo), formerly Trans-Asia Shipping Corporation Berhad, is a Malaysia-based total logistics solutions provider. The Company offers logistics solutions covering air, sea and land transportation. It has categorized its services into international logistics solutions and domestic logistics solutions. International logistics solutions provide air freight services, sea freight services and buyer consolidation services. Domestic logistics solutions provides custom clearance, haulage transportation, warehousing services and warehouse inplant services, through forwarding division; car carrier and pre-delivery inspection, through auto logistics division, and domestic trucking and cross border trucking, through trucking division.

TASCo has nine subsidiaries, including Baik Sepakat Sdn Bhd, Tunas Cergas Logistik Sdn Bhd, Emulsi Teknik Sdn Bhd, TASCO Express Sdn Bhd and Maya Kekal Sdn Bhd, among others.

TASCo's domestic operation and global alliance with NYK (a Global Fortune 500 company which is listed on the Tokyo Stock Exchange, Osaka Securities Exchange and Nagoya Stock Exchange) has made it one of the largest total logistics solutions providers in Malaysia.


WHY WE FEEL TASCO IS UNDERVALUED?

1) For 1H10, the earnings of TASCo have jumped by threefold to RM10.96 million on the back of an almost 78% increase in sales revenue to RM203.37 million. The 1H10 sterling sales revenue & earnings performance was primarily due to the recovery from the adverse global financial crisis in 1H09.

The 1H10 EPS soared to 10.96 sen (1Q: 4.14 sen & 2Q: 6.82 sen) from 2.74 sen (1Q: 0.39 sen & 2Q: 2.35 sen) in 1H09.


2) Summary of EPS since 1Q09 is as follows:-
1Q09 0.39 sen
2Q09 2.35 sen
3Q09 9.56 sen
4Q09 4.22 sen 16.55 sen

1Q10 4.14 sen
2Q10 6.82 sen
3Q10 ?
4Q10 ?

Per estimation/forecast by Dynaquest in view of the higher-than-expected 1H10, the following are forecasted:-
a) Full year EPS: 18.5 sen
b) DPS: 6.00 sen nett (CY09: 4.00 sen nett)

3) At the current price of RM1.35/share, TASCo is considered lowly valued based on the following commonly used yardsticks:-
a) Prospective PER: < 8x
b) Above average Dividend Yield: 4.44% nett
c) Only 0.67x its NTA of RM2.02/share as at 30/6/2010




Key developments for TASCO

TASCO Berhad expected to report Q3 2010 results on November 16, 2010. We envisage the results to be superlative.