PDZ to hit limit-up with RM600 million contract win?

PDZ Holdings Bhd rose 1.5 sen up to 10 sen in early morning trade today on news that it has won a RM600 million logistics contract with a top China-based e-commerce operator.

At 10.30 am, some 71 million shares were traded making it one of the most active counters trading on Bursa today.
Will it hit the limit-up? A lot of people are speculating that the stock will reach the 30 sen level as it did two years ago and even analysts think the stock will inch up as long as the market is in a bull run.

We hear that PDZ will provide logistics services to the China company. What we do not know is who is this Chinese company which PDZ has partnered with.

There is rumour that PDZ may have signed the contract with one of China’s top e-commerce operators. Alibaba Group Holding Ltd and Tencent Holdings Ltd dominate the China e-commerce market with platforms such as Taobao and JD.com Inc but who did PDZ sign with? It will be interesting to know who or which company as this is a big contract.

The new logistics contract is set to increase PDZ’s revenue and net profit in the coming quarters.

PDZ posted higher revenue of RM1.22 million for the current quarter ended March 31, 2020, compared to the preceding year corresponding quarter of RM1.04 million, due to the higher volume transported by the firm between January and March.

It recorded a net profit for the three months under review, compared to the preceding year corresponding quarter mainly due to the higher revenue and lower administrative expenses.

Expanding the logistics business is the way forward for PDZ, simply because the outburst of the Covid-19 pandemic has caused logistics activity and transportation as well as e-commerce to build up.

People are paying more attention to buying things online rather than driving to the stores to get their goods and safe themselves from getting the Covid-19 disease.

The e-commerce business is a booming business as the trend of buying online and the goods being delivered to their homes is expected to maintain.

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