Monday, August 31, 2015

GDEX: Top-line & Bottom-line Continued to Rise

Recent Results

For QE30/6/2015, GDEX's net profits rose 40% q-o-q or 57% y-o-y to RM9.2 million while revenue increased marginal by 1% q-o-q or 25% y-o-y to RM52 million. Profits improved mainly due to the group achieved cost efficiency through better cost control and monitoring.

Table 1: GDEX's last 8 quarterly results

Chart 1: GDEX's last 26 quarterly results
Financial Position

As at 30/6/2015, GDEX's financial position is deemed satisfactory with current ratio at 5.7 times & gearing ratio at 0.3 time. In addition, it has a net cash holding of RM51 million.


GDEX (closed at RM0.865 on August 28, 2015) commands a PER of 40 times (based on last 4 quarters' EPS of 2.38 sen). At this PER, GDEX is very expensive. If after we had factored in the growth rate of 20%, the stock is still pricey with a PEG ratio of 2 times.

Technical Outlook

GDEX had a scorching run after it broke above its horizontal line at RM0.47 in August 2012. It rose all the way to RM1.80 in April 2015. From this peak, its descent began. It broke below its "uptrend" line at RM1.40 in early August and quickly tested its horizontal line support at RM0.85. Can this support hold up the stock?

Chart 2: GDEX's monthly chart as at August 28, 2015 (Source:


Based on the good financial performance & healthy financial position, GDEX is a good stock to consider for long-term investment. However it is fairly expensive, even after the sharp drop in the past 4 months. If you choose to buy this stock, you need to have a fairly long term investment horizon.

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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