Kerry Express prepares IPO for up to 300m shares
published : 26 Aug 2020 at 18:43
Kerry Express Thailand, the country’s leading parcel delivery provider, has submitted an initial public offering filing to the Securities and Exchange Commission in preparation to offer up to 300 million IPO shares to the public.
The company, which was established in 2006, will become the first parcel delivery firm to launch an IPO on the Stock Exchange of Thailand (SET) index.
Referring to the IPO, Alex Ng, chief executive of Kerry Express Thailand, told the Bangkok Post the company wants to makes its name as “a homegrown Thai brand for logistics services”.
Though its parent firm is Hong Kong-listed Kerry Logistics Network, it chose to start express parcel delivery services in Thailand as the first destination before expanding to other Asean countries.
The express delivery business still has plenty of room to grow and this business, which currently sees annual double-digit growth, is a key engine for the new economy, he said.
Mr Ng stressed the company is committed to increasing its investment and recruiting more staff this year. During the outbreak, the number of staff doubled from the pre-Covid-19 period following high demand for courier services.
“We have partnered with all major e-commerce platforms even though those giant e-marketplaces have their own logistics services,” he said. “We are ready to support e-commerce, home shopping and traditional businesses, including SMEs and farmers.”
According to research and consulting firm Frost & Sullivan, Kerry Express Thailand had annual growth average of 135% from 2014-2019 and has been the first and largest cash-on-delivery service provider in Thailand based on transaction value.
Retail online sales from 2019-2024 are estimated to expand by 17.3% on average per year, attributed to the growth of social media and the government’s policy to push the country as a digital hub, said Frost & Sullivan.
Based on Kerry Express Thailand’s IPO prospectus, the company will offer no more than 300 million ordinary shares, equivalent to 17.24% of total issued and paid-up ordinary shares.
The par value is set at 50 satang per share. The company has yet to settle on the period for distributing IPO shares and the IPO price.
Funds raised from the IPO will be used to expand the company’s express delivery network, loan repayment to financial institutions and as working capital.
Siam Commercial Bank and Maybank Kim Eng Securities Thailand are financial advisers for the company.
Kerry operates deliveries through a “hub and spoke” model with parcels moving from main parcel sorting facilities to small sorting points for last-mile delivery.
As of June 30, Kerry Express Thailand had more than 15,000 service centres covering 77 provinces. The company has nine large parcel sorting centres, over 1,200 sub-distribution centres and over 25,000 delivery vehicles.
Shares of major shareholders in Kerry Express Thailand will be diluted after the distribution of IPO shares. For instance, a 63% stake held by KLN Logistics Thailand Limited will be diluted to 52.1%.
SET-listed VGI Plc’s 23% shares in Kerry Express Thailand will also be diluted to 19% after the IPO share distribution. The out-of-home media service provider is majorly owned by Bangkok Mass Transit System Plc and BTS Group Holdings Plc at 44.76% and 21.45%, respectively.