China Post to list express and logistics unit

China Post is planning to list the shares of China Postal Express and Logistics Corporation, its express and logistics unit, in Shanghai or Shenzhen next year, according to a source familiar with the matter, China Daily reported.

The float will make China Postal Express and Logistics Corporation the first listed express company in China, said Shao Zhonglin, deputy secretary-general of the China Express Association.

The integrated unit was set up with a registered capital of US$29.51 million on June 29 and combines the express and logistics operations of the group.

Liu Andong, general manager of China Post, said the integration of the express unit EMS Corporation and the logistics arm China Post Logistics was part of the plans to transform itself into a modernised post group.

The new entity will own the "all night" cargo aviation network and also have the largest domestic express service network. It will also promote resource sharing between the two sectors and help reduce costs, said the group.

Zhang Hui, an analyst tracking the logistics sector at Donghai Securities, said China Post is likely to use the high quality assets of the express sector to guarantee profits and attract investors. The company may, however, use the float proceeds for the less developed logistics business.

Analysts said the thorniest issue for the new company will be on how to divide the business between Express and Logistics Corporation and the parent group.

"That means there will be a lot of overlapping transactions between the two companies. Both companies will have problems on how to factor the relevant costs," said Xu Yong, chief advisor of China Express Consulting Website.

There are problems also, if the company opts for a clear division of its businesses and finances as it may end up facing internal competition, said Zhang.
(Source:www.cargonewsasia.com)