China’s largest logistics company SF Holding plans to sell convertible corporate bonds to raise RMB 650 million (USD 96.7 million), according to a filing with the Shenzhen Stock Exchange on Tuesday.
The proceeds will be used to pay off bank loans, buy airplanes, and build warehouses, along with other measures necessary for expansion, said the company.
SF Holding also announced in another filing that it made a net profit of 1.26 billion (USD 187.9 million) in the first quarter of this year, up 27.9% year-on-year. However, after deducting nonrecurring profit, the net profit shrunk to RMB 836 million (USD 124.4 million), down by 6.78% year-on-year.
The company, which dominates China’s high-end courier market, is seeing a new challenger in the form of JD Logistics, a subsidiary of e-commerce company JD.com that’s been trying to make its business more efficient at low costs.
JD.com founder Richard Liu has cut base salaries for his couriers and pushed them to pick up delivery orders from channels other than JD Mall to increase revenue for the still loss-making logistic arm.
A package delivery within Beijing costs RMB 11 (USD 1.6), one of its employees told KrAsia earlier this month. SF Holding’s intra-city parcel delivery starts from RMB 13.
Shares of SF rose to RMB 35.05 (USD 5.25), up by 3.3% compared with the closing price on Tuesday.
Contact the writer at jingli@kr-Asia.com