Higher margins likely from Tasco’s international business solutions

PETALING JAYA: Tasco Bhd has maintained a positive outlook for its upcoming fourth quarter of the financial year 2025 (4Q25) results on the back of improved volumes, contributions from new warehouses and lower effective tax rate.

The integrated logistics solutions provider’s diversified client base is also expected to help it weather geopolitical uncertainties, said RHB Research in a report yesterday.

The group posted a net profit of RM14.25mil and a basic earnings per share of 1.78 sen in 3Q25. Its revenue for the quarter was RM243.45mil.

The results were softer in 3Q25, dragged by lower profits from its air freight forwarding and ocean freight forwarding segments, added RHB Research.

“These were largely due to softer shipment volumes from its fast-moving consumer goods, electrical and electronics, and electric glass customers, amid geopolitical uncertainties casting a pall over regional trade activities,” said the research house.

On a brighter note, RHB Research said the group is optimistic about its international business solutions segment, which is expected to generate better margins in 4Q25, following its favourable rates which allowed the group to secure better pre-tax profit margins of 5% in 3Q25.

Into 4Q25, RHB Research said it expects Tasco to experience an improvement in terms of volume handling for its domestic business solutions (DBS) segment, which had seen a drop in pre-tax profit in 3Q25, due to seasonal festive demand.

The lower profits for the DBS segment in 3Q25 were largely due to lower contributions from contract logistics and cold supply chain arms, which were impacted by slow demand and less movement of goods.

Despite the slow movement in and out of the warehouses, Tasco’s pre-tax profit from its contract logistics segments stayed at 9% due to high warehouse occupancy.

RHB Research has maintained a “buy” call on the stock with a target price of RM1 per share.

The research house liked Tasco for its diversified businesses, solid cash flow generation, healthy dividend yield and growth prospects, on top of its cheap valuation.

Tasco is said to be ramping up its capital expenditure by incurring an additional RM240mil on qualifying expenditure by July 2026 as a move to leverage on the ongoing integrated logistics services (ILS) tax incentive prior to its end. To date, the group has RM31.1mil in utilised tax credits.

“While the newly-accounted tax incentive on smart logistics complexes may provide a cost-savings opportunity to the group, details on the new incentive remain scarce at this juncture,” the brokerage firm added.