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Thursday, September 04, 2014

GDEX: A fine rally indeed!

Background

GD Express Carrier Bhd ('GDEX') is involved in the provision of express delivery or courier services for both the domestic and international markets. In addition, it also provides logistics services (including customised logistics services).

Recent Financial Results

GDEX's top-line and bottom-line, which have been growing steadily in the past 9 years, picked up pace in the past 3 years (see Chart 1). The quickened pace of growth has been attributed to the growing demand in the e-commerce space.


Chart 1: GDEX's last 9 yearly results (Source: Equities Tracker)

Recent Financial Results

For QE30/6/2014,  GDEX's net profit increased by 15% q-o-q or 44% y-o-y to RM5.9 million while revenue grew by 5% q-o-q or 17% y-o-y to RM41.6 million.


Table 1: GDEX's last 8 quarterly results

Financial Position

GDEX's financial position is deemed healthy. As at 30/6/2014, its current & gearing ratios stood at 3.6 times and 0.4 times respectively. From the Chart 2, we can see that a rising CR and a decline GR; signs of a healthy financial position.


Chart 2: GDEX's current & gearing ratios for the last 9 yearly results (Source: Equities Tracker)
 
Valuation

GDEX (closed at RM1.98 yesterday) is trading at a PE of 69 times (based on last 4 quarters' EPS of 2.86 sen). At this PE, GDEX is very expensive.

Technical Outlook

GDEX has been in an uptrend since it broke above the RM0.40 horizontal line in July 2012 (see Chart 3). Since then, the stock has been charging up with intermittent correction that pushed through the 10-w SMA line but falling short of the 20-w EMA line. The current correction - the most severe to-date - has brought the share price to the 20-w EMA line as well as the psychological RM2.00 level. With MACD & RSI hooking down, this correction could be the tipping point for a fine rally for GDEX.


Chart 3: GDEX's monthly chart as at Aug 29, 2014 (Source: Chartnexus)


Chart 4: GDEX's weekly chart as at Aug 29, 2014 (Source: Tradesignum)

Conclusion

Despite the good financial performance & position, GDEX is a stock best to be avoided for now due to its demanding valuation. If the share price were to breached the RM2.00 psychological level, it could be a trading SELL.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GDEX.

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