GDex takes up 44.5% in Indonesia’s SAP Express

Move is in line with group’s strategy to expand regionally

PETALING JAYA: GD Express Carrier Bhd (GDex) is taking up a 44.5% stake in Indonesia’s PT Satria Antaran Prima Tbk (SAP Express) in a move to tap into the country’s fast-growing express delivery industry.

The group said it was forking out 92.71 billion rupiah (RM25.8mil) cash, together with two of its units – GDex SEA and GD Valueguard – to participate in SAP Express’ initial public offering (IPO).

SAP Express is scheduled to list on the Indonesian stock exchange today with its quoted price at 250 rupiah per share. Upon listing, the GDex companies will collectively own about 44.5% of its total paid-up capital.

In a filing with Bursa Malaysia, GDex said its participation in the IPO was in line with its strategy to expand regionally, starting with Indonesia.

“We believe Indonesia offers a vast growth opportunity for the courier business, supported by the growth of e-commerce as well as conventional business.

“The continuation of the company’s part- nership with SAP Express will enable the company to provide business advice and support, as well as knowledge transfer between the two companies,” it said.

SAP Express, which is headquartered in Jakarta, mainly provides services in the express delivery segment, as well as transportation, distribution and warehousing.

Founded in 2014, the company is a pioneer in using an Android-based application for delivery services.

As of March 2018, SAP Express was able to cover the whole of Indonesia, supported by 58 branches and 12 representative branches, as well as over 100 retail counters.

In the filing, GDex said its board was of the view that the subscription price of 250 rupiah per share was justifiable, considering the rationale of the subscription and the prospects of SAP Express.

It said the total amount would be paid entirely in cash, via internally-generated funds and cash in hand.

On SAP Express’ prospects, it said demand for delivery services in Indonesia was growing in tandem with the country’s economic growth.

Apart from corporate-related delivery ser- vices, it said the rapid growth of e-commerce in Indonesia, supported by Internet access throughout the country, would propel the growth of the e-commerce delivery industry and benefit delivery companies like SAP Express.

It added that the Indonesian government was currently undertaking various infrastructure projects, especially outside Java.

“One of the main objectives of the investments is to reduce the cost of distribution, which generally makes up 30% of the cost of goods.

“SAP Express would be able to take advantage of the new Trans-Java and TransSumatera toll roads, which would help to reduce reliance on air transportation,” it said.

GDex said the proposed subscription was not expected to have any material effect on its earnings per share, net assets and gearing.

Barring any unforeseen circumstances, it said the exercise was expected to contribute positively to its earnings and net assets in the future.

The move is not subject to the approval of GDex shareholders or any regulatory authorities.