QEX likely to raise 2019 targets after beating sales forecasts this year
By Paul McBeth
April 30 (BusinessDesk) - NXT-listed QEX Logistics expects to raise its forecasts for the newly started 2019 financial year as strong Chinese demand for local dairy products helped it beat expectations for the 2018 period.
The Auckland-based company, which joined the small-cap bourse in February, last week said its gross margins would be at least 10 percent higher than expected, and today confirmed that revenue was $31.5 million in the year ended March 31, generating a gross margin of 16 percent, with monthly parcels cleared at 75,698, all ahead of projections.
Fourth quarter sales were boosted by strong demand for dairy products through the Chinese Lunar New Year, while shortages of milk powder underpinned fatter margins. QEX also started marketing its services in Australia in the period, triggering rivals to drop their prices, the company said.
"Given the strong performance during FY18, the KOM (key operating metrics) targets contained in the listing document for FY19 are likely to be revised upwards, with the sales turnover target in particular expected to exceed the FY18 result of $31.5 million by more than 10 percent," it said. "QEX will advise the market of its KOM targets for FY19 by 31 May 2018."
QEX was founded by chief executive Ronnie Xue, who owns 80 percent of the firm, and his wife Doreen Wu in 2010, and facilitates the storage, supply, packaging, customs clearance and delivery of New Zealand products bought from stores, online and e-commerce sites by individual consumers from China.
The firm's customers include SKY Distribution Ltd, the brand marketing firm for Fonterra's Anmum infant formula, Munchkin formula maker, and Fonterra's Anchor brand.
The company joined the NXT market in a compliance listing with the shares priced at 25 cents apiece, spiking to 45 cents in its first trade. The stock was recently down 2.5 percent to 77 cents today.
QEX raised $2.6 million from wholesale investors in December and January ahead of the listing. Those funds will go towards entering Australia and developing a logistics bridge between China and the trans-Tasman nations.
NZX's NXT market was launched in 2015 with lower disclosure obligations than the main board as a means to attract smaller firms. However, like its predecessor the NZ Alternative Market (NZAX), NXT struggled to kick on and the stock market operator will abandon the bourse when it streamlines the market, with plans for a six-month transition period for smaller firms to opt-in.