3 logistics stocks that are making significant productivity gains through the introduction of AI and other technologies.

The logistics industry is facing challenges such as driver shortages and fuel price hikes, but productivity gains from the introduction of logistics systems and AI are expected to exceed the risk factor. Joint deliveries and modal shifts from trucks to railways and ships are also effective measures.

Furthermore, the introduction of new technologies such as automated driving and drones is steadily moving in the direction of realisation, with demonstration tests being carried out in the public and private sectors.

The logistics industry is expected to maintain high demand in the future.

The data in the table on this page are current as of 10 Nov 2023.

● Logizard (4391) +19.59% (6 months)

Has a cloud warehouse management system that boasts the top share of the domestic market.

Performance has expanded and sales growth has continued, with cloud services performing well on the back of an increase in new clients, as well as expansion in online shopping and 3PL.

The company announced its financial results on 14 November, with recurring profit for the first quarter of FY2024 expanding by 60.9% year-on-year to ¥110 million on a consolidated basis, reaching 33.5% of the full-year plan of ¥330 million, which is also higher than the five-year average of 26.7%.

The company is a volatile stock and should not be touched during a rally, but should be targeted for a push.

▶▶Reasons for attention

There are high expectations for the share price of Logizard as DX logistics becomes more and more widespread.

● Fides Holdings (9325) - 30.65% (6 months)

Developing a vehicle dispatch platform service best suited to solving the 2024 problem.

The company operates logistics centres and vehicle dispatch platforms for e-commerce, as well as bulk warehouse operations, staff dispatch, inter-base transportation and home delivery.

Amazon is the company's largest customer; it announced its financial results on 1 November, with consolidated recurring profit for Q2 FY2024 rising 6.1% year-on-year to JPY570m.

The company's expected PER of 11.28x and expected dividend yield of 3.31% are not overvalued, but the stock is placed outside the popularity zone. A medium-term stance can be taken.

▶▶ Reasons for attention.

The company is expected to have a promising future, depending on the development of its car-dispatch platform service, which matches the resolution of the 2024 problem.

・sg holdings (9143) - 0.24% (6 months)

Expect to see the development of new services using automated driving and drones.

Although the number of parcels handled by the parcel delivery service declined, unit prices rose as a result of price hikes, but profits declined towards the second half of the year.

Consolidated recurring profit for 2Q FY2024 fell 41.0% year-on-year to ¥39.2bn. The full-year forecast for the same profit has been revised downwards by 8.4% from the previous forecast of JPY 101 billion to JPY 92.5 billion (previous year: JPY 137.9 billion).

Forecast PER 21.45x, actual PBR 2.36x. Second largest home delivery company, share price slightly overvalued. The stock is currently placed outside the popularity zone. Can be considered a long-term stance.

▶▶Reasons for attention.

Price movement is expected to change depending on whether the company can play a leading role in the DX-isation of the logistics industry as a whole.



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