KUALA LUMPUR (Feb 26): Analysts have flagged continued margin compression at Swift Haulage Bhd (KL:SWIFT) amid intense competition, after the logistics group missed earnings forecasts for the financial year ended Dec 31, 2025 (FY2025). 

Swift Haulage reported FY2025 core net profit of RM24 million to RM27 million, which comes in below expectations across most research houses, weighed by weaker margins in land transport and warehousing.

Maybank Investment Bank noted that the earnings missed at 77% to 81% of its forecast, while Kenanga and MBSB Research noted that the results were only 91% to 97% of their estimates.

According to the research houses, group revenue rose roughly 4% to 8% year-on-year (y-o-y), close to RM772 million, but higher operating costs and margin erosion dragged profitability. Land transport earnings before interest and taxes plunged nearly 39% to 72% y-o-y, while warehousing and depot earnings fell nearly 9% to 20% y-o-y on lower utilisation. 

Besides, container haulage was flat, affected by customer plant shutdowns and stricter overload checks. Freight forwarding was the only bright spot, surging close to 29% to 41% y-o-y, supported by project cargo and contributions from Aman Logistik.

Looking ahead, Maybank Investment Bank expects contributions from the Global Vision Logistics hub and a new cold-chain venture to begin in the second quarter ending June 30, 2026 (2QFY2026), alongside ongoing warehouse expansions. However, the research house cautioned that margin volatility, elevated overheads, and intensifying competition could cap earnings upside.

There are now three 'hold' and two 'sell’ calls on the stock. The consensus target price is now 36 sen, based on the average of five research houses tracked by Bloomberg.

Maybank Investment Bank decided to downgrade to ‘sell’ from its initial ‘hold’ call on the group by cutting its target price from 41 sen to 35 sen, implying a downside of 17%.

MBSB Research also downgraded from its ‘neutral’ call to 'sell' with an unchanged target price of 35 sen, citing valuations above the sector mean.

Similarly, Kenanga Research lowered its call from ‘market perform’ to ‘underperform’, trimming its target price from 35 sen to 32 sen, warning that competition has eroded Swift Haulage’s market share and margins.