Xin Hwa rides on warehousing space boom & logistics services recovery

INTEGRATED logistics services provider, Xin Hwa Holdings Bhd is upbeat on its near-term outlook, underpinned by the prevailing warehousing boom as well as recovery in logistic services on the back of economic reopening.

The company is targeting to commence operations of its new Shah Alam E-fulfillment centre by end-October. The centre will add another 300,000 sq ft to its existing warehouse capacity of 672,000 sq ft.

“The response has been encouraging and we have already secured a new tenant which is a large well-known courier services company to take up 70,000 sq ft,” commented Xin Hwa’s managing director Ng Aik Chuan.

“We are currently in talks with multiple keen parties to take up the remaining space.”

Located strategically by the side of the ELITE Highway, the E-fulfilment centre is made up of a seven-storey office and three-storey warehouse.  It is purpose-built for not only usual storage of cargoes but is particularly well-suited for the handling of e-commerce logistics.

“The demand for warehousing space is undergoing strong uptrend,” opined Ng. “In addition to our own E-Fulfilment centre, we are also seizing the opportunities by adding two more warehouses through lease for a faster time-to-market.”

In September, Xin Hwa secured a new warehouse in Klang with a built-up of 100,000 sq ft which is now fully occupied. Another warehouse of 44,000 sq ft in Kuantan with confirmed 100% take-up rate will come onboard in November.

All in all, the three new warehouses in Shah Alam, Klang and Kuantan will boost Xin Hwa’s warehousing space by 66.1% or 444,000 sq ft to 1.12 million sq ft from the existing 672,000 sq ft.

All its existing warehouses are operating at almost full capacity.

Ng further expects high demand for project cargo services moving forward from the implementation of mega-infrastructure projects under the 12MP.

“We have in-depth experience in this area, having undertaken various project cargo jobs for MRT (Mass Rapid Transit) and private sectors as well as jobs in Singapore and Indonesia,” he justified.

“Overall, we are confident of better performance ahead with the worst behind us now.”

On the corporate front, the group had on Oct 21 completed the disposal of two pieces of industrial land totalling 6.56 hectares together with all the buildings erected thereon to Axis Real Investment Trust (REIT) for RM75 mil cash.

With its enlarged war chest for future investments, the group is currently on the look-out for merger and acquisition (M&A) targets that are earnings accretive, potentially in the area of liquid transportation, cold chain logistics as well as electrical and electronics (E&E) industry.

At 3pm, Xin Hwa was down 1.5 sen or 3.9% to 37 sen with 9.44 million shares traded, thus valuing the company at RM91 mil. – Oct 25, 2021

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