CNY Day 13 年初十三(160220-Saturday)
6:30am 4 x YB at traffice light....ER entrance & E.parade....8am..breakfast at Pang Kee RMK+T$6.....business slow down alot compare to last year....last year business good until CNY day 8 but this year day 4 already slow down......
GDex new on The Star Biz front page.....business with Yamata
Office
-LMY Phui..$182....
Bro-Tan...ping pong....still playing every Tuesday & Thursday at happy garden/kuchai apartment,normally 8 people playing...
SLl marathon ordered 1200 breads but only about 800 students turn up....
SLL went to JB for her 21st century education system workshop...
Lunch Nasi Lemak with FE at stall in front RHB...$3....
ER
-B-6-s...called from India...email statement of account...asked not so important question....may consider to move out....refused to pay TA fee...
-Yasim called wanted to rent a apartment budget 1600-1800 around 5pm appointment made on tomorrow 6pm...
Tea break at home...
6:00pm Table tenis practiced for JY at EP
- 2 APU student was playing there...1 from russia & 1 from Kuching foochow but can't speak foochow..
- JY played with then ( Russian 1 vs 2, kuching 0 vs 3).....
- JY later play with a lady (EP Tadika operator wife from Klang)...quite good
Dinner at 126 with JY...
Partnership with Japan’s Yamato making waves in the courier industry
THE tale of local courier company GD Express Carrier Bhd (GDex) continues to makes waves. At a time when most company owners are struggling with business expansion plans and battered down share prices in this challenging economic environment, GDex’s major shareholders must be embracing the high life from their intoxicating windfall.
Teong Teck Lean, the company’s main shareholder, just walked away with a cool RM93mil from selling a block of his shares to a Japanese concern, Yamato Holdings Co Ltd.
Together with him, another major shareholder, Singapore Post Ltd (SingPost), also made a killing of S$64mil (RM190.05mil) from the sale of another block to Yamato.
Yamato, Japan’s largest door-to-door delivery service company, now owns 23% of GDex via its wholly owned unit Yamato Asia Pte Ltd.
Yamato bought into GDex to use the latter as its springboard into the Asean region. A major announcement will be made in the following week of the two parties’ collaboration agreement, with Japanese media present.
The Tokyo-based holdings company has a 45.4% market share in Japan and competes closely with Sagawa Express and Nippon Express.
It founded Yamato Asia in January 2014 as part of its global strategy to become the top distribution and lifestyle support provider in Asia.
The Yamato-GDex collaboration could well be poised to tap into one of the most lucrative markets – Asean, where barriers of entry are supposed to be reducing.
Malaysia’s population of 30 million pales in comparison with the Asean region’s population of more than 600 million people.
The partnership is banking on exponentially higher demand in intra-regional trade in Asean following both the Trans-Pacific Partnership Agreement as well as the formation of the Asean Economic Community.
That said, tapping into the Asean market will not be an easy feat. For example, in Indonesia, the single largest of the Asean countries by population, there are hundreds of courier companies plying their trade.
In the past, GDex had expressed plans to expand into Indonesia and Thailand to strengthen its regional foothold. Apart from SingPost, GDex is also in a working relationship with Pos Indonesia, and had established a representative office in Jakarta in 2014.
It also has strong partnerships with major international express courier service providers such as UPS and Fedex. “These partnerships indicate the recognition of GDex’s service levels by these players, as GDex is able to integrate into their delivery system and provides last mile delivery services for them. At the same time, GDex also leverages on these partnerships to provide international services as part of a total solution package,” says HLIB Research.
GDex needs to have a clear strategy on increasing its Asean reach, which will most likely be revealed at a briefing to be held sometime next week.
On Jan 21, the company announced in filings with Bursa Malaysia that it had placed out 124.89 million new shares at RM1.74 each to Yamato Asia, representing a 9.08% stake. The Tokyo Stock Exchange-listed Yamato at the same time announced its intention to up its stake in GDex to 23% by buying more shares from other shareholders.
Then, a mere three weeks later on Feb 12, Yamato Asia increased its stake to 22.8% by buying 191.09 million shares from Teong and GDex’s second-largest shareholder SingPost.
All in all, Yamato Asia has spent a total of RM549.mil for its 23% stake. Although at a slight premium to GDex’s current share price of RM1.68, market observers feel this validates Yamato’s conviction in the former’s growth potential, despite it trading at high valuations.
Its purchase has now left Teong and SingPost’s shareholdings standing at 35.39% and 11.2%, respectively.
SingPost said the sale proceeds of S$64mil would reinforce its e-commerce logistics solutions and networks.
“This deal gave us a good return on our investment and also boosted our available resources to drive SingPost’s eCommerce logistics growth as it pivots into the United States with the recent investments in TradeGlobal and Jagged Peak,” said SingPost deputy group chief executive officer (corporate services) and group chief financial officer Mervyn Lim.
SingPost, an associate company of Singapore Telecommunications, which in turn is 50%-owned by Singapore’s national investment fund Temasek, first bought into GDex in 2011, in a deal that valued GDex at a price-earnings multiple of 35 times.
In March 2011, SingPost increased its stake in GDex to 27.08% from an initial 4.98%. This made GDex an associate company of SingPost. Woo Keng Leong, SingPost’s senior executive vice-president/head of postal services was appointed to GDex’s board of directors as a non-independent non-executive director on Feb 12, 2015. At SingPost, he is fully responsible for the operations of the domestic mail, international mail and post office network businesses.
SingPost’s interest in GDex has set the latter apart from its local competitors Pos Malaysia, Nationwide Express and City-Link Express. Insiders say that SingPost’s stake in GDex has been a strategic one, and will continue to be, despite the reduction following the sale of a block to Yamato.
GDex’s Asean focus
GDex has an extensive network in Malaysia and Singapore, with express delivery as its core business, in which the conventional business-to-business segment contributed 80% of its revenue.
The e-commerce business contributed the remaining 20%.
As for its plans with Yamato, it has been revealed that Yamato would leverage on GDex’s extensive network to offer wider coverage for Yamato Malaysia’s customers, as well as implement cross-border logistics between Malaysia and Singapore.
The two parties will also cooperate on the line haul business between major centres to further improve efficiencies. The line haul business involves transport of heavy loads of freight cargo over long distances or between cities, usually by trucks.
GDex has already been actively investing on increasing its efficiency and expanding capacity to meet the growing demands for its service. Since 2009 to 2015, GDex’s daily sorting capacity (referring to the number of parcels that go through its system) has tripled to over 100,000 a day. During this time, its staff count and fleet size doubled to 2,676 and 578, respectively.
GDex shares are currently trading at about 68 times PE, one of the highest compared with other courier companies both within the region and internationally.
The company has been trading at relatively high valuations likely owed to its growth potential, especially in the e-commerce segment.
To be sure, GDex shareholders have enjoyed phenomenal returns as its share price has performed spectacularly well since its listing back in 2005 on the Ace Market. An initial public offering shareholder would have enjoyed total returns of close to 2,000% until today.
While SingPost’s stake in GDex has been beneficial for both companies, things really started heating up when giant online retailer Alibaba group took a 10.35% stake in SingPost in 2014.
In a recent report, HLIB Research said the emergence of Yamato and SingPost as major shareholders further validates GDex’s service levels.
“SingPost (proxy to Alibaba) and Yamato (proxy to Rakuten) are expected to boost GDex’s business volumes, given the feed-in business from these partners and expanded connectivity and solutions for local clients,” it said.
Rakuten is a Japanese e-commerce and Internet company based in Tokyo. Its e-commerce platform Rakuten Ichiba is the largest e-commerce site in Japan.
GDex has leveraged on the growing e-commerce business in Malaysia, having secured business relationships with renowned online portal Groupon, Lazada, Zalora and Astro Home Shopping, by providing total solutions – warehousing, logistics and last-mile deliveries.
HLIB Research believes e-commerce is an emerging catalyst for GDex, with expectations of double-digit growth over the next five years, given the increasing Internet and mobile penetration rate in Malaysia. This is no doubt supported by improving payment gateways and product delivery platforms.
“Henceforth, GDex is expected to continue to enjoy strong business volume growth, by leveraging on the emerging trend of online purchases – business to business, business to consumer, and likely going forward consumer to consumer,” it said.
HLIB Research now projects earnings growth for the financial year ending June 30, 2016 till 2018 to be between 21% and 30%, in view of the strong volume growth and expanding margins. A point to note is that it has not factored in any upside from GDex’s recent strategic alliances and potential regional expansions.
All eyes will be on GDex’s announcement this week, as it explains details of its collaboration with Yamato. The market will then be in a better position to gauge if GDex and its partners will be able to conquer the attractive but yet challenging market of Asean.
Company outshines the competition with market cap of RM2.3bil
A couple of things make GD Express Carrier Bhd (GDex) stand out from local competitors Pos Malaysia Bhd, Nationwide Express Courier Services Bhd and City-Link Express (M) Sdn Bhd.
To begin with, GDex is the youngest courier service company, having started operations only in 1997. Comparatively, Malaysians can trace Pos Malaysia’s history back to the 1800s, while Nationwide Express was formed in the mid-1980s and City-Link was set up towards the end of the 1970s.
Despite being the youngest of the lot, GDex has become a RM2.3bil market capitalisation company, while Pos Malaysia trails with over RM1bil behind and Nationwide Express is around RM45mil. City-Link is not listed although it had previously expressed intentions to list on Bursa Malaysia’s Main Market.
One difference about GDex is the passion and commitment from its major shareholder Teong Teck Lean, who saw potential in the company despite its earlier loss-making years.
According to Pos Malaysia’s annual report for the financial year ended March 31, 2015, its courier service, Pos Laju, has 68 centres throughout Malaysia and has more than 6,500 delivery routes throughout Malaysia. Its conventional mail service, Pos Mel, has a network of 25 mail processing centres and 329 delivery branches throughout the country. Its international postal service delivered more than 150,000 FlexiPack International items worldwide.
Meanwhile, Nationwide Express has a total of 180 networks comprising branches and agents all over Malaysia, Singapore, Brunei, Thailand and Saudi Arabia. Headquartered in Shah Alam, it handles more than 50,000 packages a day while its full capacity is up to 70,000 packages a day.
It recently recorded a net loss of RM690,000 for the second quarter ended Sept 30, 2015, while there was a slight dip in revenue to RM22.8mil from RM23.67mil a year ago.
This was mainly due to lower revenue from its courier and other segments. The courier segment saw a decrease due to the lower volume of consignments, while for the logistics and other segments, freight volume handled was lower.
For Pos Malaysia’s latest quarterly results, the group posted close to a 90% year-on-year dip in net profit to RM3.5mil in the second quarter ended Sept 30, 2015, dragged down by a lower contribution from the retail; and digital certificates and printing businesses.
Revenue was 7% higher at RM398.8mil against RM371.67mil in the same quarter a year ago.
Its courier segment is the second-highest contributor to the group’s revenue, while the mail segment still dominates.
The company is looking at an earnings growth of 15% to 25% per year, banking on its courier services.
City-Link said it has an annual turnover of more than RM300mil.
Apart from Malaysia, it has operations in Singapore, Thailand, Indonesia, Vietnam, Hong Kong and China. The company’s management earlier said it will use the proceeds from the future listing exercise to invest in technology and infrastructure to serve its customers better.
It commands a 13% market share of the domestic courier service in Malaysia.
The fortunes of GDex are on the rise.
For the first quarter ended Sept 30, 2015, GDex saw net profits grow to RM6.29mil against RM4.98mil a year ago due to higher volume in the e-commerce business.
Revenue grew 17.7% during the period to RM51.47mil from RM43.74mil last year.
A notable point is that GDex has so far managed to attract the attention of two international investors, namely, Singapore Post Ltd and Japan-based Yamato Holdings Ltd. Together, they hold a 34% stake in the company, while GDex’s head honcho Teong still has the majority at 35.39%.
Pos Malaysia’s largest shareholder is DRB-Hicom Bhd with a 32.3% stake. The company was not available for comment as at press time.
Any right-minded courier service provider will now be looking to tap into the e-commerce segment, given the potential growth in the area. There are more than 200,000 Malaysian buyers and sellers on giant online retailer Alibaba group.
Whereas online fashion destination Zalora gets 3.5 million unique visitors every month. Since being founded in early 2012, Zalora now has a presence in Singapore, Indonesia, Malaysia, Brunei, the Philippines, Thailand, Vietnam, Hong Kong and soon-to-be Taiwan.
Although the local courier industry is set to see heightened growth in the next few years, given the potential growth from online businesses and e-commerce, all eyes will be on which player takes the biggest slice of the pie.
Saturday, 20 February 2016
Down to earth Teong stuns market with GD Express investment
Delivering the goods: Teong’s stint in Texas Instruments and Lembaga Letrik Negara, now known as Tenaga Nasional, is where he developed and enhanced his engineering and analytical skills.
MANY people describe Teong Teck Lean as a simple and down to earth businessman. But, they used to laugh at him when he decided to invest in a loss-making courier company called GD Express Sdn Bhd.
That courier company Teong ploughed his hard-earned money as a dealer at OSK Securities Bhd is now a RM2.3bil market capitalisation-company listed on the Main Market of Bursa Malaysia.
GD Express Bhd (GDex) has come a long way since its formation in 1997. It was established by former executives of Nationwide Express and Fedex to provide express delivery service for the domestic and international markets.
Although it got off to a good start, with some RM2.5mil from investors, it could not withstand the whiplash from the Asian Financial Crisis and just two years later, shareholders were told that funds were running dry and the possibility of having to wind up the company was imminent.
Teong’s interest in GDex took many observers by surprise.
They wondered why anyone would want to be invovled in the company. But, Teong saw the light in GDex, and although the accounts did seem like a real piece of work, he took up the challenge.
How the tables have turned now with his recent share sale totalling RM93mil to Japan’s Yamato Group.
His story has been recounted in a book and the rise of GDex entitled “A Drive For Excellence” by Philemon Soon, an ex-owner and publisher of The Sun newspaper. In the book, Soon writes of Teong’s simple background and how he came to be a millionaire.
Teong was born in a small town in Perak in 1960 as number eight to what would be a family of six boys and five girls.
His stint in Texas Instruments and Lembaga Letrik Negara, now known as Tenaga Nasional, is where he developed and enhanced his engineering and analytical skills, before moving on to his third employer, OSK Securities.
As a dealer, he was thorough and quickly became one of the top in terms of trade volume and commissions earned.
GDex had been in dire straits when Teong took a major shareholding in it in 2000, with creditors lining up for payments.
Salaries were not being paid on time and Socso, EPF and income tax were in arrears, leaving staff worried that they may soon be out of a job.
Teong brought in two Singaporean management consultants to help him straighten things out at GDex. Steps were put in to remedy the raging fire and to gradually rebuild shop.
Teong had to pick up the pieces and seriously change the attitude and working environment at GDex.
And in a mere three years, he successfully turned the company around, and soon after, he listed the company on the Bursa’s ACE Market, then known as the Mesdaq Market in 2005.
It was listed on May 17, 2005 at an initial public offering price of 30 sen. On the first trading day, the shares climbed to 40 sen.
Seven years later, GDex transferred its listing status to the Main Market of Bursa. It has a current price-earnings multiple of 68 times, signalling the potential confidence in the growth of e-commerce. Its six-year compounded annual growth rate stands at 34%.
With Yamato’s 23% stake, Teong and Singapore Post Ltd’s shareholdings now stands at 35.39% and 11.2% respectively. With the shares last traded at RM1.68 each, Teong’s shareholding of 499.3 million shares is now valued at RM838.82mil.
Both GDex and Teong will be closely observed moving forward, especially with the upcoming briefing on its collaboration with Yamato next week.
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