GDex sees e-commerce as a growth driver

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KUALA LUMPUR: GD Express Carrier Bhd (GDex) sees the booming e-commerce trade, particularly in the online shopping segment, as one of the main growth drivers for the air express company’s earnings this year.

While declining to give exact figures, managing director and chief executive officer Teong Teck Lean is positive on the group’s earnings for the financial year ending June 30, 2015 (FY15) as demand is increasing on the strengthening of the e-commerce trend.

“The drop in the oil price is benefiting most people. They have more money to spend. E-commerce will not be slowing down, [so] I see this financial year will be a good one for us,” Teong told reporters after the group’s extraordinary general meeting (EGM) yesterday.

For the first quarter ended Sept 30, 2014, GDex posted a 35.3% increase in net profit to RM4.98 million from RM3.68 million a year ago, while revenue rose 17.9% to RM43.74 million from RM37.1 million.

Teong said GDex has been expanding its capacity by getting more trucks recently.

“We are preparing for bigger volume,” he said, adding that in FY15, the group will increase its fleet by another 20 to 30 vehicles to 450.

Teong said e-commerce has changed lives as everyone can now purchase online and get their goods delivered, a trend that he believes will grow as the coming generations have more income to spend.

GDex, whose major shareholder is Singapore Post Ltd (SingPost), has benefited from the volume of parcels that are being channelled through SingPost for goods purchased from Chinese websites, Alibaba and TaoBao.

“We do see some volumes from TaoBao and Alibaba coming via SingPost. We hope that going forward we will see more of the volume coming to us as we understand more of its requirements, and as we communicate more with SingPost,” Teong said.

Earlier at the EGM, GDex shareholders approved the logistics firm’s bonus issue of up to 310.85 million new shares on the basis of one bonus share for every three existing shares held. They also approved the issuance of 186.51 million free warrants, on the basis of one warrant for every five existing shares.

After the bonus and warrant issues, the group intends to undertake a private placement of up to 10% of its issued share capital to raise up to RM227.12 million — primarily for regional expansion, with some for working capital.

Teong conceded that the broadened share base would have a dilutive effect on the group’s earnings per share, but stressed that the group’s growth would overcome the dilution.


This article first appeared in The Edge Financial Daily, on January 14, 2015.