JD Capital Signs Agreement with HNA International Logistics Group to Set Up a Fund of 20 Million Yua
On July 21, JD Capital signed an agreement with Haihang International Logistics Group to co-establish Tianxing JD Capital Management Co., Ltd., and to set up a new fund with an endowment of 20 billion yuan. The fund, by fueling the industry with capital, focuses on investing in the logistics sub-industries’ giants and innovative logistics agencies.
Forge a leader in China’s logistics industry with portfolio strategies
As one of the five major affiliated members of Hairnan Airlines Group (HNA), Haihang International Logistics Group, with a total asset of 70 billion yuan, owns two listed companies: Tianhai Capital (600751) and HNA Sinosun (831900). Underpinned by HNA Group’s strategies, HNA Logistics developed six logistics businesses, namely, logistics investment, logistics finance, logistics technology, modern shipping, equipment manufacturing and professional logistics. It is now striving to become a modern logistics agency and solution provider driven by both capital and technology.
This time, JD Capital will take full advantage of its own industrial and capital resources through the portfolio strategy of “shares plus holdings”, “stockholder’s rights plus creditor’s rights”, “short term plus long term”, “domestic plus overseas” and “level A plus level B” to enable HNA Logistics to invest in the leading companies in sub-industries as well as innovative and growing industries.
Specifically, the fund will focus on the combined sub-fields of “Internet + big data + supply chain + cloud computing + Internet of things + intelligent logistics + finance”, and will make most of its investments in high value-added areas including O2O, cold chain logistics, cross-border logistics, supply chain finance, medical logistics and vehicle-goods matching.
In addition, the fund will closely follow the development of the logistics industry in the “Belt and Road” initiative areas. It will make major investment in regions along the Silk Road Economic Belt, accelerate the construction of logistics infrastructure, expand transportation capacity, improve the relatively outdated logistics facilities and invigorate logistics economy so as to support the economic development in the B&R initiative areas with efficient logistics services.
Seize opportunities with financial support
Statistics show that China has a large logistics market with a capacity of 10 trillion yuan. However, at the current stage, there is still a lot to be desired in its market concentration and operational efficiency. The gradually developing infrastructure and new technologies will enhance market concentration, operational efficiency and proportion of third-party logistics, while reducing the proportion of logistics expenses in GDP.
From the perspective of industrial integration, China has just begun the horizontal functional integration of its logistics industry, during which period a lot of technological reforms and conceptual innovations will emerge and the industry itself will also benefit from more flexible government policies. With the foreseeable enormous opportunities, the securitization of the logistics industry will surely proceed faster in China than in such developed countries as the US. This will probably give birth to industrial titans with market value of over 100 billion yuan.
Through a shared fund platform, JD Capital and HNA Logistics will make the best of the great possibilities of industrial integration as well as their own industrial and capital resources to facilitate the horizontal expansion of HNA Logistics and fulfill the group’s strategic target of becoming a leader in China’s logistics industry.
Up until now, JD Capital has assisted the listed companies in striking nearly 30 cases of mergers, acquisitions and reorganizations, and has set up merger funds with eight listed companies.