Worth it
The mixed-ownership reform of China Eastern Logistics is mainly divided into three steps: the first step is the equity transfer, which separates China Eastern Logistics from the listed company Eastern Airlines system; the second step is to carry out core Employee stock ownership plan and introduction of strategic investors; share reform and IPO are the third step.
In June 2017, China Eastern Airlines Group signed a capital increase agreement with four investors including Legend Holdings, GLP, Deppon Logistics, and Greenland Financial Investment Holding Group, as well as shareholding representatives of core employees of China Eastern Logistics. The above-mentioned six shareholders hold 45, 25, 10, 5, 5, and 10 shares of China Eastern Airlines Logistics respectively. China Eastern Airlines Group has reduced its wholly-owned shareholding to less than 50%.
According to the latest prospectus disclosed, China Eastern Logistics is held by seven companies including China Eastern Industrial Investment, Legend Holdings, Zhuhai Pudong Logistics, Tianjin Ruiyuan, Debon Logistics, Greenland Investment Company, and Beijing Legend Holdings. . Among them, Tianjin Ruiyuan is the shareholding platform for core employees of China Eastern Logistics.
According to the reporter’s understanding, after China Eastern Logistics launched the mixed reform, three batches of employee stockholding work were initiated. Currently, a total of 169 core employees of China Eastern Logistics hold indirect shares in the company through Tianjin Ruiyuan.
Insiders of China Eastern Logistics revealed to reporters that the price of the first two batches of shareholding employees was the same as the price of strategic investors’ investment in China Eastern Logistics, both 2.87 yuan/share, while the third batch of shareholdings The employee investment price is 3.78 yuan/share.
This also means that after the listing of China Eastern Logistics on the 9th, the core employees of China Eastern Logistics who spent "real money" to invest in shares have gained nearly 8 times the maximum profit in their shares of China Eastern Logistics. They have been waiting for 4 years since the signing of China Eastern Logistics’ introduction of strategic investment and capital increase in 2017.
However, according to employee stock ownership regulations, the shares subscribed by participants will be locked for 36 months from the date of completion of paid-in capital contribution. If China Eastern Logistics achieves its initial public listing, the share holders must commit to their The underlying shares held (i.e. partnership shares) will continue to be locked for 36 months from the date of listing, and may not be transferred or sold during the lock-in period.
Freight logistics market prospects
The listing of China Eastern Airlines Logistics coincides with the good times of air cargo. Starting in 2020, due to the outbreak of the new crown epidemic, passenger flights have dropped sharply, which has also reduced the capacity to carry cargo in the bellyhold. The surge in global anti-epidemic supplies and various cargo needs has made cargo airlines with all-cargo aircraft earn Bowls full.
The prospectus disclosed by China Eastern Logistics shows that the company will achieve operating income of 15.111 billion yuan in 2020, a year-on-year increase of 3.377%; net profit attributable to the parent company is 2.369 billion yuan, a year-on-year increase of 200.70%; net profit after deducting non-attributable shares to the parent company is 22.91% billion, a year-on-year increase of 211.23.
The reporter also learned from the 2020 annual report of China Southern Airlines (600029.SH) that China Southern Cargo Logistics, which has more all-cargo aircraft, has revenue of 15.397 billion yuan in 2020, a year-on-year increase of 80.29; Net profit reached 4.013 billion yuan, a year-on-year increase of 990.49.
Entering 2021, the good times for air cargo are still continuing. The prospectus of China Eastern Logistics shows that from January to March 2021, the company achieved operating income of 4.516 billion yuan, net profit attributable to the parent company of 679 million yuan, and non-attributable net profit of 672 million yuan. China Eastern Logistics also predicts that the net profit attributable to the parent company in the first half of 2021 will be 1.42 billion to 1.74 billion yuan, which will still be positive growth compared with the same period in 2020.
However, China Eastern Logistics also pointed out that as the epidemic gradually subsides in the future, the supply and demand of the domestic and foreign air cargo markets are expected to gradually return to normal levels.
It is worth noting that in addition to China Eastern Airlines, Air China and China Southern Airlines, among the three major state-owned airlines, also regard the cargo logistics sector as the focus of mixed reform work. They have successively completed the introduction of strategic investors and employee support. It is expected that the listing of shares will be promoted in the future in accordance with the ideas of China Eastern Logistics.
“The logistics industry has developed greatly in recent years, but air cargo has been gradually marginalized and its profitability is not strong. Although the cargo business was booming during the epidemic and became a life-saving straw for various companies, as medical equipment in various countries Production is on track and international air cargo has returned to normal. We will not be able to make that much money in the future, and there will be no way out if we don’t change," Lin Zhijie, an insider in the civil aviation industry, told reporters.
“From a business model perspective, China Eastern Logistics needs to further transform and develop into a new high-end commercial logistics service provider with ‘big data modern warehousing on the ground’ based on the existing partial successful transformation, and create a "Modern aviation logistics service integrator," Liu Shaoyong, chairman of China Eastern Airlines Group, told reporters, "Therefore, listing is not the end of mixed reform, but a new starting point for deepening reform."