Chinese logistics group De Well is seeking a listing of one of its entities on the Hong Kong Stock Exchange.
The Cayman Islands-incorporated entity, De Well Holdings, is part of the group, which was founded by Yang Shi and his wife Cheng Fang, starting with De Well International Freight Forwarding (Shanghai) in 1992. The couple were previously employed at Cosco Shipping and Sinotrans.
De Well Holdings’ listing prospectus, filed Friday, gave no timeframe for the listing, which aims to raise funds for business expansion. Citi and China International Capital Corporation are joint bookrunners, but no fundraising target was disclosed.
The founding family, namely Mr Yang, Ms Cheng and their son, Yang Yi, retain a combined 64.09% stake in De Well Holdings through another entity, DW Management, with Cainiao, the logistics arm of Chinese e-commerce group Alibaba, being the company’s second-largest stakeholder, with a 29.5% stake. Cainiao had bought into De Well Holdings on 14 September 2021, five months after the latter’s incorporation.
The unprecedented spike in container freight rates saw De Well group’s revenue tripling year-on-year in 2021, to $1.13bn, making the group the largest Chinese end-to-end cross-border supply chain solution provider in the Asia-North America trade lanes in terms of revenue. Net profit was up 33% to $9.73m.
The group’s ocean freight volumes, dominated by transpacific cargoes, totalled 186,862 teu in 2021, up from 165,999 teu in 2020. Air freight volumes increased to 7,862 tonnes in 2021, up from 6,009 tonnes in 2020. To support its business, De Well group operates six container depots in Shanghai and 10 warehouses across the US and China.
In December 2021, De Well acquired a 70% stake in US freight forwarder ELC Group for $28m to boost its air logistics capacity.
De Well is not the only company in the container shipping sector to turn to the capital markets. China United Lines has applied for a Hong Kong IPO while TS Lines boss Chen Te-sheng had said previously that the company hopes to be listed in Hong Kong this year.
