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Thailand's 2nd-largest deliverer files for IPO in e-commerce boom

Kerry Express raises funds to boost logistics in challenge to Thailand Post

Kerry Express Thailand has a 39% market share by number of deliveries, trailing only state-owned Thailand Post. (Photo courtesy of the company)

BANGKOK -- Kerry Express Thailand, the country's second-biggest delivery services operator, has filed for an initial public offering to raise funds to capitalize on a rapidly growing logistics market spurred by demand due to the coronavirus pandemic.

"The funds raised from the IPO will be spent to expand the company's distribution network, increase its delivery centers, pay back loans and used as working capital," the company said in a statement.

The company, established in 2006, is a local subsidiary of Hong Kong-listed Kerry Logistics Network. It has a 39% market share by number of deliveries, ranking behind state-owned Thailand Post's 41% share, according to Siam Commercial Bank think-thank SCB EIC.

According to the IPO prospectus submitted on Wednesday to the Securities and Exchange Commission, Kerry Express Thailand will offer as many as 300 million new shares, equivalent to 17.2% of its total issued shares after the IPO. The company has yet to set the subscription period for the IPO shares and price.

The company said it has more than 15,000 service centers across the kingdom with more than 1,200 distribution hubs, operating over 25,000 delivery service vehicles. It offers several types of delivery services including business-to-business and business-to-consumer. Its corporate clients include supermarket chain Big C, Central Department Stores and convenience store FamilyMart.

"We have partnered with all major e-commerce platforms even though those giant e-marketplaces have their own logistics services," chief executive Alex Ng was quoted by the English-language daily Bangkok Post as saying. "We are ready to support e-commerce, home shopping and traditional businesses, including SMEs and farmers," Ng added.

Kerry Express Thailand posted a net profit of 1.3 billion baht ($41.6 million) in 2019, up 12% from the previous year. It also reported a net profit of 737 million baht in the first half of this year, up 36% from a year earlier.

SCB EIC forecast that Thailand's delivery market would grow 35% to around 66 billion baht this year due largely to the rapid growth of e-commerce, which is estimated to expand 17% to 100 billion baht.

Thailand, like many countries around the world, has experienced a sharp increase in demand for online shopping and other electronic transactions as people spend more time at home as part of measures to fight the spread of COVID-19.

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