GDEX 1QFY26 Earnings Miss, Outlook Still Positive

GDEX’s 1QFY26 results came in below expectations, with core net profit (CNP) of RM0.4m, down 87.3% quarter‑on‑quarter and representing only 2% of the full‑year forecast. The weak performance was mainly due to slower‑than‑expected volume recovery at NETCO and delays in project awards within its technology segment. Excluding remeasurement of receivables allowance and FX losses, earnings remained subdued.

Year‑on‑year, GDEX swung to a CNP of RM0.4m from a core net loss of RM0.5m, supported by improvements in logistics, which turned around from losses to profit. However, group profit before tax (PBT) fell 78.6% YoY, dragged by weaker technology earnings, which swung from RM1.2m PBT to RM0.4m loss despite higher revenue.

GDEX

Quarter‑on‑quarter, CNP fell sharply due to weaker contributions from both logistics and technology segments. NETCO continued to weigh on logistics, while technology earnings weakened on project delays and a 9% revenue decline.

Looking ahead, near‑term earnings are expected to remain pressured by softer logistics demand and higher freight costs amid the ongoing US‑Iran conflict. GDEX has imposed surcharges for international and East Malaysia deliveries to offset rising air freight costs, though margins remain under pressure. Ground delivery fuel costs are partly mitigated by government fleet card subsidies. Longer‑term, restructuring at NETCO and stronger contributions from GD Xchange are expected to support growth.

Near‑term challenges

Following the earnings miss, forecasts for FY26‑28F CNP were cut by 46%/2%/6%. Despite near‑term challenges, analysts maintain a BUY call with an unchanged target price of RM0.20, based on 30.0x FY27F EPS of 0.7 sen, supported by a three‑star ESG rating. Risks include competition in express delivery, execution challenges in IT diversification, and continued underperformance of NETCO in Vietnam.

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