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The Malaysian Reserve - GDEX Rides On E-commerce

Dec 07, 2016

GD EXPRESS Carrier Bhd (GDEX) is leveraging on the booming growth of e-commerce in Malaysia.

GDEX head of strategic planning and investment advisory division Jerry Lee said the company is currently expanding the sorting capacity and delivery resources to absorb volume from the market to capture the growth of e-commerce.

“E-commerce is a trend now and is steadily growing. We need a bigger capacity to capture the growth of e-commerce.

“We are expanding the sorting capacity and delivery resources to absorb the volume from the market. We are now refurbishing our sorting hub,” Lee told reporters after the company’s AGM in Shah Alam yesterday.

“If you see our revenue breakdown, 75% is coming from the conventional business while the remaining 25% is from e-commerce. Previously, e-commerce was only about 10%,” he said.

Lee said GDEX has allocated capital expenditure of RM30 million for financial year 2017 (FY17) to expand its sorting hub capacity and increase its fleet size. He said the company targets to add 50 to 100 trucks every year. Its current fleet size is 700 trucks.

Lee said the company’s capacity will be increased between 100,000 and 120,000 parcels per day compared to the current 80,000 parcels a day.

For FY16 ended June 30, 2016, GDEX’s net profit increased 21.7% to RM34.4 million from RM28.3 million in the previous year, attributed to an increase in the demand of delivery services as a result of a higher volume of e-commerce transactions, especially the increase in online purchases before the festive seasons.

“We hope to sustain at similar growth achieved in the past years. However, it depends on the market situation. We foresee the second-quarter (of FY17) to be good as year-end sales will boost delivery services,” he said.

He also said merger and acquisition is still on the card for GDEX and it is actively on the lookout to expand its network in Malaysia and in the region.

He said the company had recently entered into a convertible bonds agreement with PT Satria Antaran Prima (SAP) to subscribe for its convertible bonds to be issued by SAP.

The bonds, he said, will be converted, representing a 40% equity stake in SAP within five years.

“We are providing advisory services to our partner in Indonesia,” he added.

GDEX currently has operations in Malaysia and Singapore, and is expanding to Indonesia through its partnership with SAP. GDEX also acquired a 30% stake in Web Bytes Sdn Bhd, which is principally engaged in the business of software solution.

He said the company will harness the synergy with Web Bytes to explore innovative solutions and provide better services to its customers.

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