PETALING JAYA: After having already rallied over the last few weeks, some logistics counters continued to rise, although analysts have attributed specific reasons as to why three particular stocks performed well.
Yesterday, leading package delivery services provider GD Express Carrier Bhd (GDEx) rose 12 sen to hit a new high of RM2.12, nudging its historical price earnings ratio up to a whopping 78.18 times.
An analyst who covers the stock said GDEx’s rise was mainly due to the proposed bonus issue announced last Friday.
GDEx is proposing to undertake a bonus issue of up to 4.71 billion new ordinary shares in the company, on the basis of three bonus shares for every one existing GDEx share held on an entitlement date to be determined later.
Meanwhile, Tiong Nam Logistics Holdings Bhd closed 1.8% higher yesterday at RM1.72. The company recently said it was going to launch long-haul land trucking routes cutting through Thailand, Vietnam and Laos to reach China. It is also planning to venture into parcel delivery, banking on e-commerce growth.
An analyst who covers Tiong Nam said: “It is understandable that some deem Tiong Nam to be a proxy for the logistics industry, being the largest warehouse operator in the country. But bear in mind it also has exposure to property development.”
Another logistics counter to go up yesterday was Tasco Bhd, which added 11 sen to close at its all-time high of RM2.28.
On a year-to-date basis, Tasco, which is venturing into the cold chain segment, has risen by some 51.5%, and analysts said that its rise yesterday was a continuation of a focus on logistics players and the whole buzz around e-commerce and the recent launch of Alibaba’s logistics hub in Malaysia.
While another analyst agreed that the Digital Free Trade Zone (DFTZ) theme does support the logistics sector’s share price movement, he said that the current rally seems to be sentiment-driven rather than fundamentally-driven.
This is because the earnings impact for the sector is still uncertain, until after the tentative first phase launch of the DFTZ at end-2019.
Fund manager Danny Wong of Areca Capital Sdn Bhd cautioned that the e-commerce trading idea may fall short of investors’ expectations.
“Logistics players stand to be beneficiaries of the e-commerce wave, which is one of the largest and fastest growing businesses in Malaysia.
“But what if those e-commerce plans do not take place, or turn out to be not as great as thought to be?
“If the expectation of logistics counters falls short, then some of these stocks’ performance will be considered as having stretched to the high side,” said Wong.
Over the past week, logistics counters have enjoyed a rise of RM342.6mil in their total market capitalisation.