Kerry Logistics plans roadshow to promote share sale

Kerry Logistics Network, the logistics unit of Kerry Properties, plans to kick off a one-week roadshow on Monday for a share sale that could raise up to HK$2.2 billion. The company is the latest candidate in a flood of Hong Kong initial public offerings.

Established in 1981, the Hong Kong-based third-party logistics service provider plans to use the freshly raised capital to develop logistics facilities on the mainland and Southeast Asian markets on the back of a surge in inter-regional trade and domestic consumption among the rising middle class.

According to the preliminary listing prospectus, it plans to strengthen its presence in China, which represents about 45 per cent of its overall revenue, and to expand into mainland cities by building a 1.3 million square foot logistics centre, which is set to commence construction as soon as next year. Pricing is set for December 12 and trading is due to start on December 19.

Kerry Logistics aims to cash in on the increase in mainland domestic consumption as Beijing compensates for the slowdown in export growth.

About 27 per cent of its 30 million sq ft of logistics space is on the mainland. It has expanded its automotive parts distribution centre in Kunshan with the 360,000 sq ft centre set to open next year. It also aims to build an 878,000 sq ft logistics centre in Thailand.

Revenue from the mainland rose 8.4 per cent year to HK$4.2 billion in the first half to June, while that from Southeast Asia expanded 20.1 per cent to HK$1.4 billion from newly acquired business in Vietnam last year and the start of a regional logistics hub in Singapore in the first quarter.