Trading portal for shipping eyes IPO
A mainland online trading portal for the shipping industry is planning to set up a joint venture with logistics firms and freight forwarders before a possible initial public offering in Hong Kong or on a rival offshore bourse by 2015.
Shippingchina.com plans to seek two core investors to form a joint holding company with a registered capital of up to 200 million yuan (HK$245 million) in Hong Kong or Shanghai in the next eight months. The portal, which was formed in 2003, allows cargo owners and freight forwarders to make bookings with container lines covering 80 mainland inland and sea ports.
Once the joint company has been established, up to 200 freight forwarders will be asked to invest a further 100,000 yuan to 1 million yuan by July 2013 to acquire shares in the outfit. The cash will be used to expand the operation of the portal and build the e-commerce platform.
Kang Shuchun, chief executive of shippingchina.com, said the aim was to launch the IPO in 2014 or 2015. Alternatively, the company would embark on a third round of raising cash by offering shares to container lines, ports or investment firms.
Kang said the portal can transact about 3 million teu (20-foot equivalent units) of cargo container fixtures.
Under current proposals, Kang said the registered company hoped to obtain local government support at each port to establish an online freight payment and tax settlement service for forwarders. He estimated the holding company would generate more than 10 billion yuan in revenue from trading fees associated with these and the online booking services within the next two or three years.
One industry insider said the system was similar to Tradelink in Hong Kong or existing container shipping portals such as INTTRA, GT Nexus or CargoSmart which allows freight forwarders to book the preferred routing for cargo with container shipping lines.
'What shippingchina.com is planning sounds closer to the Tradelink operation by offering an online payment and tax settlement option,' the shipping executive said.
But he cautioned that freight forwarders and cargo owners could be reluctant to use a commercial system if they thought confidential information was at risk of being shared with other community members or that it was relatively expensive.
'When the Digital Trade & Transportation Network in Hong Kong was launched six years ago it already had a difficult gestation. Initially there were concerns from small and medium-sized enterprises over who controlled their sensitive commercial and client data. Then there were concerns the system was too sophisticated for many smaller companies, which is why it took four years from inception to operation,' the shipping source said.
The percentage of freight forwarders on the mainland linked to an online trading portal for the shipping industry