PETALING JAYA: Logistics and courier companies rallied strongly yesterday ahead of a reported meeting between Alibaba Group Holding Ltd’s executive chairman Jack Ma (pic) and Prime Minister Datuk Seri Najib Tun Razak this week for the launch of a new regional distribution hub in Malaysia.
As at closing time yesterday, more than six listed companies reported gains of between 2% and 13% on heavy trading volume.
The largest local player, Pos Malaysia Bhd , led the gainers to a new all-time high of RM4.65 per share, which represents a nine sen gain from last Friday’s close. Another prominent logistics operator, GD Express Carrier Bhd (GDEX), also rose nine sen to an all time high of RM1.95.
Among the logistics counters that reported strong gains were Integrated Logistics Bhd , Tasco Bhd , Tiong Nam Logistics Holdings Bhd , Nationwide Express Holdings Bhd, Freight Management Holdings Bhd and Complete Logistics Bhd.
According to recent reports, Alibaba plans to set up a hub within the KLIA Aeropolis, a 24,700-acre development led by Malaysia Airports Holdings Bhd that will generate more than RM7bil in domestic and foreign investments.
The e-commerce giant’s plans to set up a distribution centre in Malaysia goes hand-in-hand with Alibaba’s online expansion aspirations in South-East Asia. The company had earlier invested US$1bil for a stake in Singapore-based online store Lazada South East Asia Pte Ltd, the largest online platform in the region.
In a research note yesterday, MIDF Research raised its target price for GDEX to RM2.28 from RM2.06 previously, citing the company as a major beneficiary from the coming e-commerce boom.
The research house also unveiled potential incentives that could be included with the new Alibaba hub. The government will be adopting new measures to woo prominent e-commerce players to set up shop in the country as part of the National E-commerce Strategic Roadmap.
The potential incentives include tax holidays for e-commerce platforms that establish their regional distribution hubs in Malaysia, tax exemption for goods priced below RM1,200 and assistance for small medium enterprises to adopt e-commerce.
“GDEX is a prime beneficiary of e-commerce growth as a pure play courier service provider which has increased its daily parcel sorting capacity from 78,000 a day in financial year (FY) 2016 to 85,000 a day as of 1HFY17. We expect the company to be able to increase its capacity to 100,000 parcels a day under normal conditions by end-FY17,” it explained.