GD Express’ sorting capacity increased with new Kuching hub
KUCHING: GD Express Carrier Bhd’s ( GD Express) sorting capacity has increased with a new multi sorting hub in Kuching following the group’s first quarter of financial year 2018 (1QFY18) briefing centred on increasing operating expenditure (OPEX) to remain operationally competitive.
According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), with efficient operational planning, GD Express’ average sorting capacity has increased to approximately 100,000 parcels per day in 1QFY18 (from 96,000 parcels in FY17) with a maximum capacity of 120,000 to 130,000 parcels per day.
This translates to a utilisation rate of 80 per cent.
“This is in tandem with its newly established multi sorting hub in Kuching in addition to its three other hubs located in Petaling Jaya, Penang and Johor,” MIDF Research said in a report yesterday.
Although GD Express’ 1QFY18 earnings were dented by increasing OPEX such as the establishment of new branches to its domestic network and warehouse space expansion, the research arm believed the increase in operational assets is necessary in order to remain operationally competitive due to the rising demand in e-commerce activities.
MIDF Research also gathered from the briefing that GD Express leveraged on the group’s strategic associate, Web Bytes to develop an in-house mobile application for its couriers which went operational in July 2017.
“The mobile application enables its couriers to track pickup and delivery of parcels on a real-time basis, improving operational efficiency,” the research arm said.
“As the business-to- business ( B2B) segment remains dominant contributing near 70 per cent of its revenue but the business-to- consumer ( B2C) segment approximately at 30 per cent with tight margins.
“Henceforth, GD Express is on the plan to develop further application with Web Bytes to aid its entrance into the consumer-toconsumer (C2C) segment.”
MIDF Research valued the company using a two-stage discounted cash flow method ( DCF) which assumed a weighted average cost of capital ( WACC) of nine per cent, and terminal growth rate of three per cent.