AGX Group starts upward trend with more upside seen

AGX Group Bhd may not be a familiar name as it is a fairly new listing on Bursa Malaysia. The freight forwarding and aerospace logistics provider made a commendable gain of 17% at 41 sen versus its IPO price of 35 sen.

The counter then fell to a low of 24 sen in April. Fortunately, it started to trend upwards to touch a high of 54 sen end of July.

Investors looking for yield would be happy that AGX has adopted a dividend policy of at least 30% of its annual profits. For the nine months ended Sept 30, 2023 (9MFY2023), the company reported a net profit of RM9.16 million on the back of RM138.16 million revenue.

Prior to its market debut, the company saw an oversubscription of 15.43 times for its IPO and raised RM33.78 million.

As part of the company’s expansion plans, AGX will set up a new warehouse and office in Port of Tanjung Pelepas (PTP), Johor to complement its operations in Singapore.

It is able to offer competitive pricing for its SIngapore customers as it generates revenue in Singapore dollars while its costs are denominated in ringgit.

The company also plans to set up an office in Penang to expand its presence in the northern region of Malaysia, as well as one in Busan, South Korea to support its sea freight business division.

Meanwhile, AGX expressed its interest in expanding its presence to Indonesia, Thailand and Vietnam, aiming to become one of the largest industry players in the Southeast Asian region.

It is already present in five out of eight big Asean markets, namely Singapore, Malaysia, the Philippines, Myanmar and Cambodia. Indonesia, Thailand and Vietnam.

AGX also reiterated its commitment to focusing on the aerospace segment, which accounted for 37% of its revenue base.

The company is well-positioned to ride on the growing industry as more people in the Southeast Asia want to travel.