KUALA LUMPUR (May 28): GD Express Carrier Bhd's (GDEX) share price lost ground this morning, reversing its recent upward trend after a disappointing set of quarterly earnings for the third financial quarter ended March 31, 2020 (3QFY20).

The courier service provider's share price dropped more than 12% or 5.5 sen to 39 sen. Trading volume swelled to 88.9 million shares, making it the fourth most actively traded counter on Bursa as at 11am. Still, the counter has climbed more than 200% from the trough in mid-March at 12.5 sen amid the expectation of growing volume on e-commerce due to the nationwide Movement Control Order.

However, the reality appears to be different. The company said that supply chain disruptions started in January as a result of the Covid-19 outbreak, which has also impacted its customers' operations. As a result, its net profit shrank to RM210,000 in 3QFY20, down 96% year-on-year, despite 13% growth in its quarterly revenue at RM88.24 million.

In addition, the effects of assessments and adjustments it had to make under the MFRS 16 accounting standard also contributed to the weaker quarterly earnings.

GDEX explained quarterly revenue growth was partly contributed by its newly acquired Vietnamese subsidiary.

On outlook, the company said it expects to see positive volume growth coming from digital platforms in all segments, including B2B (business to business), B2C (business to consumers) and C2C (consumers to consumers). But the company needs to adjust to the evolving business environment.

According to Bloomberg data, three analysts covering GDEX were seen to split equally between "buy", "hold" and "sell" ratings. The average 12-month target price was 30 sen, which is lower than current market price.