GDEX (0078) - GDEX - Your Christmas Express Delivery Service
GDEX - Delivery Service You Trust. The
slogan that the company had been using since 1997 when it was formed.
GDEX is a courier service which operates a network of 136 stations,
comprising of 59 branches, 2 affiliate stations, 52 agents and 23
lodge-in centres through East and West Malaysia. GDEX has a fleet of
more than 400 trucks and vans used primariliy for hauling of documents
and parcels between stations and the National Hub (termed "line-haul"
fleet) for local pick-ups and deliveries [1]. The principal activities of GDEX are express delivery and logistics. Express delivery is delivery of products from door to door. Logistics
is defined as warehousing and distribution for the products. There are a
lot of competitors for the delivery services, like, Fedex, DHL, Pos
Laju, ABX, Nationwide and etc etc. But in Malaysia, only GDEX and POS
are listed in Bursa. And moreover, GDEX is Malaysia homegrown company. So i guess we should be support local companies. GDEX is highly active in Malaysia and Singapore.
As we all know, the growing trend now in our world is online shopping aka e-Commerce.
Online shopping is very convenient and easy. Just one disadvantage
about online shopping, sometimes the thing we buy might not be the same
as we buy. I tried online shopping buying a jacket, my personal
experience is very convenient and easy, which prompt me to buy more
stuff online. The reason why i am attracted to GDEX is because of the approaching Christmas Season. Christmas is a season of giving and receiving.
Everywhere is decorated with Christmas decorations totally a happy
atmosphere. And usually in the year end, there will be sales everywhere,
and of course, there are sales in online shopping also. I browsed
through Zalora and Lazada websites. And i noticed that GDEX had been doing their deliveries (refer to the pictures below). For Lazada, there is even Mega Days sales, counting down... If there are Mega Sales, things will be cheap, and consumers will buy more and more deliveries will be made.
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| Zalora website with GDEX doing their deliveries |
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| Lazada website with GDEX doing their deliveries |
And recently, ASTRO GO SHOP launched their ASTRO TV in Channel 318 and Channel 118.
And also GDEX is doing their deliveries. Just to confirm on GDEX and
ASTRO, i try googled and confirmed through the snapshot below.
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| ASTRO GO SHOP with GDEX delivering their products |
When
i browse through i3 investor, i saw analyst report from Hong Leong and
RHB Investment Banks (refer to my sources link below [2] and [3]). GDEX
is a hardworking and always catching up with their orders. I managed to
ask my friends to snap a few shots for me. So the pictures below are
real pictures. Thank you, my friends (Mr. WYBF) for your pictures.
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| GDEX On-The-Move truck near to Citibank, KL |
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| Snapshot from Facebook user in GDEX office near Damansara Perdana, KL |
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| GDEX in Sarawak |
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| GDEX workers motorcycles on Saturday. They are still working on Saturdays to finish the unfinished orders. |
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| Parcels to be handled. |
And
i believe, in December, the delivery services is going to increase. And
i believe the trend might continue till February as we have new year
2016 and Chinese New Year.
1) Fundamental Analysis:
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| Revenue and Net Profit from 2011 to 2016 |
From 2011 till 2015, the revenue and net profit had been uptrend, with average net profit margin around 10.84%. GDEX is currently net cash with RM35,871k in the form of cash and deposits in the account, with net cash per share of RM0.029 [5]. According to Mr Chairman, Dato' Capt Ahmad Sufian in Annual Report 2015, GDEX is ready to spread its wings to the ASEAN region, with the first trade representative office in Jakarta in December 2014[4].
The revenue of GDEX in Jakarta is not reported, i expect the readings
from Indonesia will be kicking in in the next few quarters. Strong growth in demand for express delivery services had prompted GDEX to increase resources in all areas of operations, in systems and processes, infrastructure, warehousing, vehicles and manpower.
Even Mr CEO, Mr Teong Teck Lean had spearheaded a special task force to
look into areas where operational efficiencies can be further improved
and where growth opportunities can be maximized.
The management foresees that the rising popularity of the Internet and e-Commerce
will contribute to an upsurge in demand for express delivery service.
So that is why they are having the hassles to upgrade and further
enhance their technologies and operations. The demand had posed new
challenges in the way of infrastructure, systems and processes, vehicles
and manpower. In the Annual Report, GDEX had increased the vehicle
fleet size from 453 to 578, raising the carrying tonnage capacity from
1,005 tons to 1,436 tons, while leasing additional warehouse spaces to
105,726 sq. ft. Manpower strength had increased to 2,676 from 2,315 to
cater for the increased scope of operations. Furthermore, GDEX foresees opportunity within ASEAN region, given the booming e-commerce (greater than Malaysia), especially post implementation of AEC (ASEAN Economic Community). Management is targeting start-ups in Indonesia and Thailand through M&A or JVs by 2015-16, which may further accelerate GDEX earnings growth [2].
Over
the past 6-years, GDEX has expanded and diversified its clientele base
(banks, telcos, electrical and electronic manufacturers etc) due to its
ability to deliver reliable and quality services, ensuing strong growth
in business volume [2]. GDEX is easily spotted in Lazada and Zalora websites.
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| Established Customer Base from Source [2] |
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| Revenue and Net Profit by Quarter |
The revenue from Malaysia and Singapore had increased 24% and 49% respectively comparing against 2014 and 2015. In the Q1 2016 Report, revenue from Malaysia and Singapore had increased 18% and 19% respectively comparing against Q1 2014 and Q1 2015. By breaking down into operating segments, the net profit for express delivery had increased 37% due to the increased demand of the courier services for e-commerce business.The
demand of logistics segment has moved in a slower pace and the net
profit had decreased 21% comparing Q1 2015 and 2016. In the comments
about seasonal or cyclical factors, the management clearly stated that
GDEX revenue will be affected by the numerous public and festive holidays.
Did they mean that, they agree with the Christmas which is a season of
giving and receiving? GDEX's Q2 includes the month of September,
November and December, and the Q2 is expected to be announced in
February 2016. The PE of the stock is high (64.70), so i
think it is not favourable by most investors. The analyst reports by
Hong Leong and RHB is crystal clear and can provide more details on the
fundamentals.
2) Technical Analysis:
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| GDEX daily chart |
GDEX had been suffering a big downtrend from highest 1.84 to lowest 0.82, from April to September. Then, after that, the price started to rebound. The SMA 200 had crossed over SMA 50, which means that the chart is currently having a bear moment. But now, the SMA 50 is slowly uptrending and will cross over SMA 200 in a few weeks time, before Q2 result being announced. If we draw a Fibonacci from the top to the bottom, we can see supports at 23.6%, 38.2%, 50.0%, 61.8%. The next support, i would like to highlight will be 1.45, which coincide with 38.2% and also the red rounded areas. Currently the chart had broken the uptrend channel and looks well supported at the middle band. Once broke the support at 1.45, must remember to cut.
I saw two resistances, 1 is at 1.65,
whereby the chart had tried 3 times to penetrate or go above the point.
And when it retraces in May, it also touch the 1.65. The Fibonacci of 23.6% at 1.60 can also be another support. So, i guess we can call the zone between 1.60 to 1.65 as support. Notice that i draw a round bubble at the volume on April? In order for GDEX chart to break 1.65, it requires 50% of that volume to have a successful breakthrough.
The volume on that that day (2 April 2015) is 55,158, so in order to
have a successful breakthrough, the volume should be 27,579. Another
support will be 1.83, which will be the historical high. The Target Price given by both RHB and Hong Leong are 2.05 and 1.80 respectively. For me, let's aim for 1.83.
3) Projection Analysis:
Now,
lets flashback at what happened in 2013 December and 2014 December in
the technical analysis. As we saw from the fundamental analysis up
there, the increment of Q1 and Q2's revenue for 2014 and 2015 is 9% and 15% respectively; while the net profit of Q1 and Q2 for 2014 and 2015 improved 137% and 45% respectively.
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| December 2013 to February 2014 |
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| December 2014 to February 2015 |
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| Projection Analysis for 2015 |
Summary:
GDEX
had been expanding their business throughout the whole ASEAN. Together
with the increasing demand of online shopping, by right, GDEX's revenue
and net profit will keep growing. With the pictures proving that the
GDEX in Kuala Lumpur and Sarawak are busy facing the bulking orders from
the online merchants such as, ASTRO GO SHOP, Lazada (mega sales
countdown), Zalora, the future seems promising.
- Support local company, support GDEX for express delivery services.
-
The trend of online shopping is getting popular now alongside with the
rising popularity of the internet and e-Commerce, with the emergence of a
lot of online shopping portals such as Lazada, ASTRO GO SHOP, Zalora,
Groupon, etc.
- By comparing with last 2 years Q2, the net profit definitely higher than Q1 by at least 40%.
- Net cash per share of RM0.029.
-
Mr CEO himself spearheaded a team to further improve their systems and
processes, infrastructure, warehousing, vehicles and manpower.
- Targeting start-ups in Indonesia and Thailand through joint ventures and mergers and acquisitions in 2015 and 2016.
-
There is a seasonality for GDEX. GDEX revenue will be affected by the
numerous public and festive holidays, With the higher demand of express
deliveries especially in Christmas season, we expect GDEX Q2's revenue
and net profit to be higher.
- Q2 result will be announced in February 2016, which includes the month of October, November and December.
-
High PE of 64.70, might not be favourable by most investors. However,
RHB and Hong Leong provides very detailed report, it is advised to go
through to increase the confidence level. (refer to source 2 and 3).
- SMA 50 is slowly crawling up above and across SMA 200. If this happens, the stock is back from bear moment.
- GDEX chart had a support at 1.45, which coincide with 38.2% and previous supports.
- The next resistance will be at 1.65, and a successful breakout will require at least 50% volume of 2 April 2015 (27,579).
-
1.83 will be the resistance, if break 1,83, then sky is the limit.
Target price given by RHB and Hong Leong is 2.05 and 1.80 respectively.
- A projection of 20% is taken into consideration and will hit the target price of 1.83.
-
Ideal Risk to Reward Ratio (RRR) of 1:4, Reward of 1.83 and Risk of
1.45, considering bought price of 1.52, it will be 1 Risk : 4 Rewards.
Once broken the support of 1.45, must cut immediately.
GDEX to deliver his promise during the season of giving and receiving?
You better watchout, you better don cry, you better dont pout i'm telling why. G D E X's coming to town.... Your call...
You better watchout, you better don cry, you better dont pout i'm telling why. G D E X's coming to town.... Your call...
Gainvestor short term TP: 1.83
Let's Ride the Wind and Gainvest
Gainvestor 10sai
6 December 2015
10.45pm
Sources:
[1]: http://www.gdexpress.com/[2]: Hong Leong Analyst Report: http://gdexpress.listedcompany.com/misc/HongLeong_20150402.pdf
[3]: RHB Analyst Report: http://gdexpress.listedcompany.com/misc/RHB_20150324.pdf
[4]: Annual Report 2015
[5]: Q1 2016, Q2 2015, Q2 2014 Report
[6]: Lazada website, Zalora website, ASTRO GO SHOP website.
http://gainvestor10sai.blogspot.my/2015/12/gdex-your-christmas-express-delivery.html
