The company’s market capitalisation has gained over two fold since then.
Despite the general bullish sentiment surrounding GDEX, its managing director and chief executive officer Teong Teck Lean has his feet firmly on the ground and concedes that the company still has a long way to go.
“This is only the beginning as GDEX is a small company. We must not forget to benchmark ourselves against the other players in the industry. If you look at FedEx (US based Federal Express Corp), in 33 years they penetrated some 200 countries. So although GDEX is among the fastest growing here, to me it’s still very slow (growth),” he says.
The courier company’s growth has been impressive. From about 200 daily customers some five years ago, the company now boasts of as many as 1,600 clients utilising its services everyday.
In line with these improvements GDEX’s fortunes have also taken a turn for the better, and the company turned the corner in its financial year ended June 2002.
For the cumulative nine months ended March this year, GDEX posted a net profit of RM894,000 on the back of RM6.1mil in sales.
According to its prospectus, GDEX is forecast to post an after tax profit less pre-acquisition profit of RM2mil on the back of RM43.6mil in sales.
In its notes accompanying its financial results, GD Express says that there may be some variance from its forecasts. “The analysis on the variance from the profit forecast will only be available when the Group announces the results for the final quarter of the financial year ending 30 June 2005,” it said.
Meanwhile, Teong says. “The real growth will come from outsourcing jobs. For example, if you talk about the telecom business, if they (the telcos) outsource part of their operations, such as marketing material, pamphlets, warehousing and controlling of inventories, it could be worth quite a bit.”
“This business is huge. If more companies shift to this type of outsourcing, it could be worth a lot. This is the future of the business. This is what GDEX is targeting,” he says.
GDEX’s plans for growth are not just centred on the local front. Recent news reports quoting Teong and other company officials have said that the company will venture into regional markets in five years time.
Teong qualifies these statements: “We have already taken the initial steps to start operations abroad … within five years. I plan to do it in three.” He says GDEX will likely first venture into Thailand and Singapore due to their geographical proximity. The venture abroad, he says, is now a necessity. “Sometimes we have no choice. If our clients expand say to Thailand we have to as well. In this business, everyday is a race…”
GDEX has been aggressively penetrating the east Malaysian market. “Over the last couple of months we have opened six to seven outlets at a cost of about RM300,000 each. In April we started marketing in Sarawak. We spent over RM1mil in Sarawak opening four outlets. In the next one-year we will invest about RM2mil in Sabah and Sarawak.”
Still, GDEX has yet to appeal to the investing fraternity.
He explains that the courier business focuses on long-term relationship building with customers. “Courier services are needed everywhere. The important thing is you have to earn your clients’ trust; once they trust you they will outsource more to you. It’s about forging a relationship,” Teong says.