SF Express unit to raise $300m through convertible bond offering

Customers line up at an S.F. Express store in Hong Kong.Photographer: Anthony Kwan/Bloomberg

SF Freight, a sub-brand of one of Chinese delivery service SF Express, has agreed to issue and sell convertible bonds to a group of companies for a combined $300 million, according to a recent filing with the Shenzhen Stock Exchange.

Investors include an RMB-denominated fund of China-focused CITIC Capital, as well as affiliates of Beijing-based alternative asset management company CDH Investments, and Legend Capital, the venture capital unit of Chinese conglomerate Legend Holdings, among others.

The deal comes after SF Express created the freight unit in 2015 and launched the standalone brand, SF Freight, in October 2019 to specialise in the less-than-truckload (LTL) shipping, a transportation service for relatively small loads.

“In view of the vast market potential in express service and consideration to enhance our capabilities in offering comprehensive logistics solutions, the company has been focused on the development of express service centred around LTL shipping,” said SF Express.

The introduction of new investors will help SF Freight continue to increase investment in the construction of its logistics network and technological R&D, said the company.

SF Express is raising the stakes in the LTL shipping service, which can accommodate the smaller shipping demands of various businesses to realize economies of scale, as the market is expected to grow extensively in the Asia Pacific.

The limited penetration of LTL services in APAC provides growth opportunities to the players to expand their business operations and maximize their profits from 2019 to 2025, according to WiseGuyReports.com.

SF Freight was valued at 9.9 billion yuan ($1.42 billion) to 11.2 billion yuan ($1.61 billion) as of August 31, 2019, according to KPMG China cited in the filing. The sub-brand predicted to have generated a revenue of 12.51 billion yuan ($1.80 billion) and a net loss of 378.92 million yuan ($54.37 million) in 2019.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.