KUALA LUMPUR (Nov 12): Shares of GD Express Carrier Bhd were among top gainers at mid-morning on Wednesday after RHB Research initiated coverage on the stock.

At 10.48am, GDEX rose 3.98% or 8 sen to RM2.09 with 574,600 shares traded. The counter had earlier risen as much as 4.48% to RM2.10.

RHB Research started GDEX at RM2.01 with a "buy" rating and target price RM2.42, valuing the stock at an implied 81x FY15F P/E.

In a note Wednesday, the research house said GDEX had seen 10 years of strong earnings growth, which was expected to remain resilient in the coming years on the capacity expansion of its express delivery service and logistics arm as the drivers.

According to RHB Research, GDEX has more room to grow as the company believes that e-commerce has changed the way business is done and that it is in a sweet spot to ride on this bandwagon.

“Street thinks improvements in regional internet infrastructure will facilitate transaction volumes and allow the company to grow its business.

“Note that GDEX not only focuses on Malaysia’s 30 million population, but the ASEAN region’s 600 million inhabitants as well. We believe this gives it huge growth potential,” it said.  

RHB Research said GDEX’s expansion opportunities were huge.

It said the company started its restructuring process in 2013 and switched its focus towards a broader market beyond Malaysia towards ASEAN.

“The establishment of the ASEAN Economic Community (AEC), with the goal of integrating the region’s economy by 2015, may be an opportunity for GDEX’s next quantum leap, namely to grow with the integration of ASEAN’s markets.

“The AEC envisages the following key characteristics: i) a single market and production base, ii) a highly competitive economic region, iii) a region of equitable economic development, and iv) a region fully integrated into the global economy,” it said.