The average target price of SLH.AX is 2.1 and suggests 29% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 2.1. This translates into 31% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 2.1. This suggests 28% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Silk Logistics Holdings Limited provides port-to-door landside logistics and supply chain services in Australia. It operates in two segments, Port Logistics and Contract Logistics. The company offers port logistics services, including wharf cartage; and contract logistics services, such as warehousing and distribution. It serves retail, fast moving consumer goods, light industrial, food, and other industries. Silk Logistics Holdings Limited was incorporated in 2013 and is headquartered in Port Melbourne, Australia.

Australia

Silk Logistics Holdings Limited

Industrials

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been low and below its peers. On average, the company pays dividends annually. 

SLH.AX reported revenue of AUD 568mn in the last 12 months, up 11% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 100% from FY23 to AUD 0.00. Market expects EPS to reach AUD 0.12 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 16ppts and its growth accelerated by 10ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.0% in the last 12 months, a decline from 14.2% in FY24. 

Historically, SLH.AX has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -0.2%, down from 1.3% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to -0.2% in the last 12 months, a decrease from 1.5% in FY24. The market analysts predict that RoA will be 1.0% in FY25, again weaker than its peers. 

Silk Logistics Holdings Limited reported a return on equity (RoE) of -1.1% in the last 12 months, down from 9.1% in FY24. The market consensus projects an RoE of 7.1% in FY25, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -0.2%, below the peers. The consensus estimate for FY25 for RoCE is 3.2%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.7 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SLH.AX has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, weak debt servicing capacity, and an unfavourable capital structure. 

In highly turbulent market conditions, SLH.AX is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, SLH.AX is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, underpriced on P/FCF. 

Silk Logistics Holdings Limited

A$ 1.61

4

Silk Logistics Holdings Limited

A$ 1.61

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 1.61

About

About

About

About