Logistics-related property is a hot sector in China now, thanks to a boom in e-commerce, with just a handful of developers enjoying the spoils. Wuzhou International Holdings is one of them. The Jiangsu-based developer posted revenue of 2.5 billion yuan (HK$3.1 billion) in the first half of this year. Founder and chairman Shu Cecheng has been busy talking to strategic investors in an effort to speed up his company’s expansion as the logistics industry develops. Ping An Real Estate, PAG and Global Logistic Properties are not among your shareholders now, right? They will be in the future. We have announced that Ping An Real Estate and PAG will invest in our convertible bonds. The bonds will most likely be converted into shares, as we’ve given them a cheap premium [on conversion price] of only 8 per cent. Otherwise, we would ask for a premium of at least 25 per cent. We have discussed the option of allowing them to become shareholders directly, but the approvals would take longer. They are keen to invest before our share price rises too much. As potential shareholders, we can give them a low premium. The conversion can take place at any time. Our co-operation with Global Logistic Properties is on a project level right now. We will possibly talk about [its equity investment in our listed company]. We have met both Global Logistic Properties and Ping An Real Estate and see the possibility of even bigger deals in the future, but details are yet to be finalised. Global Logistic Properties wanted to join in the convertible bond issuance this time, but the other two investors did not want to wait. We do not exclude the possibility of Global Logistic Properties becoming a shareholder to jointly expand the company. They are all confident about the foundation we have laid. What are the advantages you have that make them so interested in your company? Our business covers 11 provinces in China, a broader reach than our rivals. There are four Hong Kong-listed players in this [trade centre and logistic property] business – China South City, Yide, Zuer and us. We can buy land at a lower price and build faster [than Global Logistic Properties]. But our client pools are different. Global Logistic Properties is China’s largest logistics property operator, but its clients are mostly the world’s top 500 firms. Our clients are mostly small and medium-sized enterprises. China’s economy was driven by big foreign firms in the past, but domestic firms are growing quickly. So we can work perfectly together. Once consumption picks up, our business will grow fast because that will need support from trade centres, logistics services and warehouses Both Global Logistic Properties and Ping An value highly our client base of small firms and ability to get cheap land. In Shenyang, Ping An bought a plot for 320,000 yuan per mu (667 sq metres), while we bought a parcel, nearer to the city centre, at 250,000 yuan per mu. We will bring a full industry chain to cities, creating jobs and taxes. So we have strong bargaining power in land negotiations with local governments. So in the partnership, we will lead talks with local governments about land acquisitions, and joint projects will also use our current land reserves. For example, a joint project with Global Logistic Properties will use our land in Zhengzhou. Are you talking to other investors? I’m not fond of financial investors, as I can borrow from banks. And I don’t need a lot of money now. Apart from Ping An, many investors from China and abroad are interested in investing in us. I have a pool of 77,000 clients, much more than many of our rivals. Our trade and logistics centres build up very long industry chains, which can help cut cost, improve services and better enable us to survive a downturn. I haven’t explored the business potential of the full industry chains yet, as the company’s funding cost was a bit high in the past. With the new money coming, I can do more. So what is your current funding cost? It is 8.9 per cent on average. Trust funds cost 11 to 14 per cent per annum. Our outstanding trust loans are about 700 million yuan. We will gradually cut the proportion of trust loans. But some are not mature yet and cannot be redeemed. Our loans from commercial banks are priced at a premium of 10 to 20 per cent on benchmark interest rates. In the next few years, our debt structure will improve and long-term loans will account for a higher proportion as we hold more assets for lease. Do you have any further fundraising plans? Not in the short term. But I’ll let in strategic shareholders. I am willing to further lower my stake in the company. The next decade is a decade of co-operation between companies. I need to be open to all possibilities. I have confidence in my company as all our projects in operation are more than 92 per cent leased. The sector we are in has a bright future as sooner or later China will become the world’s largest consumer market. Once consumption picks up, our business will grow fast because that will need support from trade centres, logistics services and warehouses. In the next five to 10 years, we will become a very good platform. We are opening eight projects in the second half, after completing four in the first six months. That is fast expansion compared with a total of 18 projects before 2014.