Shenzhen-based SF Holdings, the parent of SF Express and SF Airlines, has announced the issuance of six-year convertible bonds to raise CNY5.8 billion (US$825 million). In an announcement, the company said CNY1.52 billion will be used to purchase aircraft and maintenance materials, while CNY1.49 billion will be spent on the development of a new logistics information system.
In addition, the airline plans to upgrade an automated transportation system (CNY1 billion), enhance land transport capacity (CNY590 million) and repay loans and reduce its asset liability ratio
SF Airlines has China’s largest freighter fleet, consisting of 30 Boeing 757-200PCFs, 17 737-300/400SFs, eight 767-300BCFs and two 747-400ERFs. The latter are two ex-Jade Cargo International aircraft, which were bought online by SF Airlines in November 2017.
From China via Hahn to the European market
After the aircraft were initially put into operation on domestic routes and since May on the sector Shenzhen-Chennai, SF Airlines launched its first intercontinental route with the B747-400ER in September when it started service from Wuxi to Frankfurt Hahn, with a stopover in Chongqing.
In a recent statement, the airline said that “after the operation is normalised,” the thrice-weekly service will transport more than 600 tonnes of shipments for SF’s international business from the Chinese mainland to Europe.
In a related development, China's news agency Xinhua reported that three major Chinese express delivery companies reported robust revenue growth in October amid an e-commerce boom in the world's second-largest economy.
In a filing to the Shenzhen Stock Exchange, SF Holding said its revenue from the express delivery business rose 24.5% year on year to 8.98 billion yuan (US$1.28 billion) last month, while it handled 438 million parcels, an annual increase of 48.5%.
Contrasting these figures, a report by Caixin earlier last week said that China’s express delivery industry has descended into all-out war as the industry is facing growing pressure to consolidate.
Delivery companies have opted to sacrifice margins to boost growth as they seek to wrestle market share away from the competition.
The report referred to an analysis by Industrial Securities Co. Ltd. which said that across the board, revenue per parcel has fallen in the third quarter of 2019. Industrywide, average revenue per parcel declined 2.24% from the second quarter.
Nol van Fenema
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