The South Korean shipping and logistics firm will invest 480 million Chinese yuan renminbi for a 50 percent share of Shenzen Speedex Commercial Service, a subsidiary of Chinese electronics manufacturer TCL, according to an announcement from TCL.
CJ Korea Express will invest 480 million Chinese yuan renminbi (U.S. $72.45 million), equal to 3.42 percent of the company’s equity capital, for a 50 percent share of Chinese logistics firm Shenzen Speedex Commercial Service, a subsidiary of leading Chinese home appliance firm TCL, according to an announcement from TCL (original in Chinese).
Under the agreement, a Chinese holding unit of the South Korean shipping and logistics provider will form a joint venture with TCL, the third largest manufacturer of televisions worldwide.
According to TCL, CJ Korea Express recorded a net profit of CNY288.4 million on CNY28.9 billion in revenues for the full year in 2015. TCL, on the other hand, posted a net loss of CNY5.8 million last year on revenues of CNY589 billion.
Analysts expect CJ Korea Express to use the JV to expand further into the logistics market in China, first and foremost by securing TCL’s global shipment volumes.
“CJ Korea Express is likely to enter China’s consumer-oriented delivery service market after acquiring Speedex,” Ha Joon-young, an analyst at HI Investment & Securities, told the Korea Herald.
“The company‘s stock will maintain its price-to-earnings ratio as it is speeding up expansion in China,” Joon-young added.
Shares of CJ Korea Express rose 4.2 percent on the news, closing at 212,000 won per share on Tuesday compared with 203,000 won per share at close of trading on Monday, Aug. 1.
CJ Korea Express acquires 50% stake in Chinese logistics firm
