ALK SP / ALK.SI
From Referrals to Regional Scale
Logistics
All-Link Air & Sea Limited provides freight-forwarding and logistics services primarily for cross-border e-commerce, electronics and other time-sensitive cargo, with a focus on routes connecting China, ASEAN and the United States. Revenue increased from US$4.8mn in FY23 to US$74.1mn in FY25 following the onboarding of the TikTok Group1 and additional customers in the Philippines and Malaysia. The Group currently operates through Singapore, Malaysia and the Philippines, while Vietnam and Thailand represent potential expansion markets.
The Group owns no aircraft, vessels, warehouses or road-transport fleet. It procures space from airlines, general sales agents, co-loaders and other freight-forwarding partners and earns the spread between freight charges billed to customers and the cost of purchased capacity. The model limits fixed-asset requirements and allows capacity to be adjusted with customer demand. Nevertheless, changes in carrier and fuel costs may not always be passed through immediately because of customer negotiations, competition and timing differences.
The two largest customers accounted for approximately 79% of FY25 revenue, the top five customers accounted for 89.9%, and customers referred by All-Link PRC contributed 90.4%. FY25 revenue increased by 3.6%, but gross profit declined by 15.4% and profit attributable to shareholders declined by approximately 25%. A sustained re-rating will require evidence of direct customer acquisition, more balanced customer contributions, stable gross margins and improved operating cash conversion.
We initiate coverage on ALL-LINK AIR & SEA LIMITED with an OUTPERFORM rating and a 12-month target price of S$0.82, based on our DCF valuation (11% WACC and 2% terminal growth). Our target price implies upside of 55.1% from current levels.
Key downside risks include (i) customer and referral concentration; (ii) non-exclusive and volume-uncommitted contracts; (iii) trade-policy changes; (iv) pressure on freight spreads and reliance on third-party cargo capacity; and (v) execution risk.
