AGX delivered 4QFY25 CNP of RM3.1m (-53.8% YoY, -31.1% QoQ), bringing its FY25 results to RM18.7m (+29.7% YoY). After including exceptional items, this represents 89.1% of our forecast and 96.4% of consensus estimates. We deem the results missing our expectation.
We revise our earnings forecasts by lowering the contributions from All-Link. As a result, our CNP estimates are reduced by -17.0%/-18.2% for FY26F/FY27F.
We maintain our BUY call with a lower TP of RM0.62 (from RM0.74) supported by a three-star ESG rating.
Results below expectations. Excluding exceptional items, namely a net foreign exchange loss of -RM1.5m and a net reversal of impairment losses of +RM0.2m, AGX reported 4QFY25 Core Net Profit (CNP) of RM3.1m (-53.8% YoY, -31.1% QoQ). On a full-year basis, FY25 CNP came in at RM18.7m (+29.7% YoY), after adjusting for earlier non-recurring expenses. This accounted for 89.1% of our forecast and 96.4% of consensus estimates. The earnings shortfall was primarily driven by lower-than-expected contributions from its 30% associate, All-Link, alongside margin compression arising from an unfavourable shift in revenue mix.
YoY. Despite revenue surging +29.0% YoY, CNP registered a sharp decline of -53.8% YoY, underpinned by a significant contraction in associate contributions, which fell -86.1% YoY. The decline was attributable to a slowdown in e-commerce activities during the quarter amid heightened trade uncertainties. In addition, earnings were weighted down by an unfavourable shift in revenue mix, as contributions from its lower-margin segments, particularly Sea Freight Forwarding and Air Freight Forwarding segments, increased to 65.7% in 4QFY25 from 55.8% in 4QFY24. This mix shift resulted in a 410bps contraction in gross profit margin, further pressuring profitability.
YTD. FY25 CNP surged +29.7%, supported by higher revenue contributions across all business segments, led by Air Freight Forwarding, which recorded the strongest growth at +64.0% YTD. As the segment expanded its revenue share by +689bps, which offsets a 381bps decline in the contribution from lower-margin Sea Freight Forwarding, the Group’s CNP margin improved modestly by 38bps.
QoQ. CNP fell -31.1% QoQ, primarily driven by a -61.3% decrease in share of associate results. This underperformance was slightly mitigated by the +18.6% in QoQ revenue, with the largest increase coming from its Sea Freight Forwarding segment with a +34.6% improvement, driven primarily by robust air freight demand from the Group’s Vietnam and Penang operations.
Outlook. While we remain confident in the Group’s ability to deliver gradual operational improvement over the coming quarters, we are mindful of heightened global trade uncertainties, driven by increasing geopolitical tensions and renewed concerns following the latest US tariff announcement. That said, we expect contributions from the higher-margin Aerospace Logistics segment to provide a key earnings buffer, underpinned by the Group’s recent landmark contract with Malaysia Airlines Berhad (MAG), and supported by the ongoing regional aviation Maintenance, Repair and Overhaul (MRO) upcycle. In addition, AirAsia X Bhd’s strategic pivot toward smaller aircrafts, following the cancellation of its initial order for 15 larger Airbus A330neo aircrafts, is expected to be supportive of sustained activity within the Aerospace Logistics segment. Conversely, we remain cautious on contributions from All-Link, as its earnings profile remain highly sensitive to fluctuations in cross-border e-commerce flows from North Asia into Southeast Asia, which could remain volatile amid an uncertain global trade backdrop.
Earnings Revision. We revise our earnings forecasts by lowering the contributions from All-Link. As a result, our CNP estimates are reduced by -17.0%/-18.2% for FY26F/FY27F.
Valuation. We maintain our BUY call with a lower TP of RM0.62 (from RM0.74), based on unchanged PE of 12.2x FY26F EPS of 5.0 sen, supported by a three-star ESG rating.
Risk. Exposure to volatile trade flows, fuel price swings and fluid freight rates.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.878434 | 3.909825 |
| EUR | 4.590523 | 4.595422 |
| CNY | 0.567561 | 0.568180 |
| HKD | 0.495911 | 0.499417 |
| SGD | 3.065484 | 3.087199 |