Logistics firm sets goals for growth

Indonesia-based J&T Global Express, which has operations across China, has applied for listing in Hong Kong and is reportedly looking at raising US$500 million (HK$3.9 billion) to US$1 billion in the share sale.

Co-founded by Chinese entrepreneur Jet Li Jie in Jakarta, the global logistics firm operates primarily across Southeast Asia serving the mainland, Indonesia, Vietnam, Malaysia, the Philippines, Thailand, Cambodia and Singapore. It has a 22.5 percent market share in terms of parcel volume in Southeast Asia, making it the biggest delivery operator in the region, according to a report by Frost & Sullivan.

Argentine soccer superstar Lionel Messi, who led his country to victory in the 2022 Fifa World Cup is its global brand ambassador.

J&T has also expanded into Saudi Arabia, the UAE, Mexico, Brazil, and Egypt to tap into new markets. In order to improve connectivity among the countries it serves, it has expanded its cross-border logistics services, encompassing small parcels, freight forwarding and warehousing solutions.

J&T provides express delivery services to merchants and consumers on major e-commerce platforms like Shopee, Pinduoduo, Taobao and Tmall, as well as on popular short video and live streaming platforms such as TikTok, Douyin and Kuaishou 1024).

The company has established a "scalable adaptive business model" by collaborating with regional sponsors and claims to be the sole player in Southeast Asia and China to effectively implement this model.

The regional sponsors commonly have equity interest in J&T's regional headquarters and/or operating entities within their respective regions.

The regional headquarters are responsible for devising the operational strategy and execution plans in each market. This includes determining the density and geographic locations of sorting centers, line-haul routes, and network capacity.

Meanwhile, the sponsors oversee the network partners through regional operating entities. In specific locations, the sponsors are also responsible for managing directly operated pickup and delivery outlets and service stations through their regional entities.

J&T has a portfolio of 104 regional sponsors and an extensive network of around 9,600 partners. It also operates 280 sorting centers and over 8,100 line-haul vehicles, including more than 4,020 self-owned vehicles, with around 3,800 line-haul routes, as well as over 21,000 pickup and delivery outlets.

The firm's revenues have been on the rise, from US$1.54 billion in 2020 to US$4.85 billion in 2021, and further to US$7.27 billion in 2022 and it swung to a net profit of US$1.57 billion last year from a net loss of US$6.12 billion in 2021.

In May this year, J&T acquired Fengwang Information, a subsidiary of SF Holdings, for 1.18 billion yuan (HK$1.28 billion), to boost its service capabilities. The acquisition is expected enhance J&T's competitive advantage in the e-commerce delivery sector and contribute to the overall growth of the industry.

J&T intends to utilize the proceeds of IPO to expand its logistics network, enhance its infrastructure, and bolster sorting and warehouse capacity and capabilities in Southeast Asia and other markets.

The funds will also be used for expanding into new markets and diversifying services, as well as investing in research and development and technological innovations.

Morgan Stanley, Bank of America and CICC are joint sponsors for the IPO.