【 运输股 】KGW Group | 12Invest

Recently, the moderator saw that people are starting to focus on transportation stocks. Today, I will be introducing KGW Group Berhad (KGW, 0282), an asset-light transportation stock. I believe everyone will have some gains after reading it.

Looking at the general market situation, the Red Sea incident caused many shipping costs to rise. The original ones include: 1) the need to hire shippers at a higher cost, 2) the need for more expensive insurance, and 3) the need to borrow farther routes, such as moving to Cape of Good Hope, which will directly affect the supply chain and transportation costs.

According to information, the shipping cost per 40ft container has nearly doubled (this is an average value, not a specific route). Although it has not returned to the high level during the pandemic, it is still higher than normal.

To give you a real example, the transportation cost of a 20ft container (“TEU”) in Shanghai-North Europe has rapidly risen from USD2,530 in March 2024 to USD7,400. You can see how much the increase has been.

So what does today's KGW shipping cost matter?

Of course it's relevant; KGW is a shipping company listed in 2023, mainly involved in sea freight (“Sea Freight”) and air freight (“Air Freight”) between Malaysia and the US, but it still mostly uses sea freight.

According to my personal observation, KGW's shipping costs should have increased quite a bit recently, especially after the recovery of economic activity (more container transportation), and many merchants are already wary of potential supply chain disruptions after experiencing the pandemic, so the company's performance should continue to improve.

Also, KGW is an asset-light NVOCC. Simply put, it doesn't need a ship on its own; instead, it focuses on arranging container transportation, so the problem of asset impairment... It shouldn't have appeared on them.

Recently, Hong Leong Investment Bank also reported that the company is expected to reach a quarterly profit (“PAT”) of around RM3.0 million in the future. In terms of current market capitalization, I believe there is still some room for operation.

But the premise is that I've been investing in KGW for a long time, so I don't rule out that I prefer it, so watch the clams carefully...

Furthermore, once transportation costs rise, investors can actually pay close attention to commodity companies, such as Palm, Steel, etc., all of which have the potential to rise.

Anyway, KGW's performance should continue to improve in the future. For the time being, capital flows have surfaced, but not many people know about this company.

So, what do you think of the shipping industry?

Photo source:

Disclaimers:

The moderators are not licensed stock analysts, so we don't provide any trading advice. If necessary, you can ask a licensed stock analyst or licensed stock broker.

The current status of the moderator is iFAST Capital Sdn. Bhd. He is also the Marketing Representative of TA Securities Holdings Berhad, and is an independent financial content writer and provides financial advisory services.

At the time of writing this article, or in the short term (within 3 months), the moderators themselves are interested in investing in or already holding the above companies, unless a new one appears, so readers must check the independence of the content.

Finally, the content shared above is all information, news, and content obtained by individuals through various channels; all content mentioned in the article can only be used for reference, learning, education, and information purposes, and is by no means any professional financial, investment, or trading advice. If you want trading advice, please consult a professional stock analyst or investment bank, and then judge the risks and potential benefits yourself. I would like to state once again that 12Invest is in no way responsible for the accuracy, completeness, correctness, or validity of any content or opinions shared. All decisions made after reading the article are the responsibility of the readers themselves. Remember, any investment involves risk, so take steps to protect yourself.

#12INVEST

#KGW

#BURSA

#LOGISTICS