A global US fund is buying up shares in PDZ

Global funds from the United States are believed to be buying up shares in PDZ Holdings Bhd on talks that the company has won a RM600 million logistics contract with a top China-based e-commerce operator.

The few names that have come up are Amazon and eBay, the large platforms that operate through many segments.

The US is the world’s most developed market for online shopping by far, and either one of them taking a stake in PDZ could mean that they want to have a bigger hand in the logistics business as far as Asia.

PDZ rose to 16 sen this morning at around 10.45 am with some 420 million shares traded. It was and still is, the most actively traded counter on Bursa today.

The stock jumped as high as 7 sen up from yesterday’s closing price of 9 sen. Some believe the share will hit limit-up this week. This was anticipated when the stock was trading between 5 sen and 7 sen.

We don’t known who PDZ has partnered with in China but the names we hear are Alibaba Group Holding Ltd and Tencent Holdings Ltd who currently dominate the China e-commerce market with platforms such as Taobao and Inc.

This RM600 million contract is a big deal for PDZ as it will help to improve the company’s financial earnings and gain new investors. 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. The logistics business is sky-rocketing because of the Covid-19 pandemic.

The Global Logistics market accounted for $11.68 billion in 2020 and is expected to reach $15.88 billion by 2027, growing at a CAGR of 4.5 per cent during the forecast period. Some of the key factors propelling the market growth are rising use of multimodal transport and innovation in mobile technologies.

On the basis of geography, Asia is anticipated to hold considerable market share during the forecast period due to the factors such as the occurrence of many consumer base for food and beverage and healthcare invention suppliers, greater than ever demand for LNG, mounting demand for cold-chain logistics, and escalating number of automobile manufacturing plants are causal to the logistics market growth in this region.

So it makes sense if the US-based e-commerce platform is eyeing Asia for growth.

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