Suning Commerce, 1/03/17
Chinese consumer electronics and home appliance retailer Suning Commerce Group (002024.SZ) recently announced that its wholly owned subsidiary Suning Logistics will spend RMB 4.25 bln to acquire Hangzhou-based logistics company Tian Tian Express. The transaction will be completed in two parts. Suning will first spend RMB 2.975 bln in cash to purchase 70% of total Tian Tian Express shares, and will then spend RMB 1.275 bln to acquire the remaining 30% stake within 12 months after the first transaction is completed.
Tian Tian Express, established in May 2010, specializes in logistics and express pick-up and delivery services. The company's total pick-up and delivery transactions in 2016 are expected to reach 1.26 bln items, and daily transactions in Q4 2016 are expected to exceed 5.5 mln orders per day. Tian Tian Express operates 61 distribution centers throughout China, has more than 10,000 delivery stations, and manages over 1,800 operating routes in its network. The company expects its net after-tax profits to reach at least RMB 84 mln in 2016, and projects that 2017 net after-tax profits will be at least RMB 180 mln.
Suning Logistics said that acquiring Tian Tian Express will strengthen its last-mile delivery capabilities and management of key network nodes, in order to form a comprehensive delivery services network incorporating both self-operated and partnership-based delivery services.