Valuation as high as 1.4 billion, a US line head freight forwarder was sold
Safround Logistics is a local Chinese freight forwarder and the top freight forwarder ranked 15th in the United States. There was some good news recently. On October 13, Bondex Logistics Co., Ltd. (stock code: 603836) announced that it plans to acquire a 49% stake in Safround Logistics, its holding subsidiary, the head freight forwarder of the United States Line, for ¥686 million. After the completion of this transaction, Bondex Logistics’s shareholding in Safround Logistics will be changed from 51% to 100%, and Safround Logistics will become a wholly-owned subsidiary of Bondex Logistics.
The valuation has soared 73 times in four years
Bondex Logistics spent ¥686 million to acquire 49% of Safround Logistics, which corresponds to the valuation of the 15th domestic freight forwarder on the US line of up to ¥1.4 billion. Four years ago, in December 2018, Bondex signed an equity transfer agreement with Zhou Shaoyu, the founder and main shareholder of Safround Logistics, stipulating that Zhou would transfer his 51% stake in Safround to the company at a price of ¥9.784152 million. 51% of the shares were sold for ¥9.784 million, that is, the overall valuation of Safround Logistics four years ago was ¥19.1846 million. In just 4 years, the valuation of Safround Logistics has soared nearly 73 times. The data shows that Safround Logistics was established in September 2017 with a registered capital of ¥70 million. Looking back on the acquisition in 2018, the stake of Safround has brought Bondex’s income scale to a new level. In 2019 and 2020, Safround contributed ¥1.214 billion and ¥2.383 billion of shipping business revenue to Bondex, accounting for 64.30% and 79.36% of the listed company’s current shipping business revenue, respectively.
The performance of the commitment is not low, and it is doubtful for the result
Bondex officially stated that there is an investment promise that Safround Logistics’ audited net profit after deduction from 2022 to 2024 should be no less than ¥200 million, ¥110 million, and ¥110 million respectively. As of May 31, 2022, the total assets of Safround Logistics were ¥1.452 billion, and the owner’s equity was ¥358 million; after evaluation, the company’s shareholders’ entire equity was assessed to be ¥1.402 billion, and the value-added rate was 298.45%. In 2021, Safround Logistics achieved an operating income of ¥6.542 billion, a net profit of ¥446 million attributable to the parent, and a net profit of ¥444 million after deduction.
An asset appraisal company has forecast the performance of Safround Logistics in the next few years. Among them, Safround Logistics’ net profit forecast data attributable to the parent from 2023 to 2025 are ¥97 million, ¥108 million, and ¥130 million, which is a significant decline compared with the company’s profit in 2021. Safround Logistics’ operating income forecast data from 2022 to 2025 were ¥7.383 billion, ¥3.942 billion, ¥4.346 billion, and ¥5.136 billion respectively, with large fluctuations.
Since the second quarter of 2022, the global economy has slowed down, and under the adjustment of supply and demand, the price of shipping has fallen significantly during the year. Under the macro trend of the return of global shipping prices, the unit price of Safround Logistics was adjusted simultaneously, which led to a decline in the company’s operating income level. According to the current market conditions and industry forecasts, the price of the shipping business will maintain a downward trend in 2022, and the price will remain stable from 2023 to 2027. In terms of cargo volume, since 2019, Safround has maintained the top 20 in the NVOCC world rankings for China-US routes for three consecutive years. From January to August 2022, Safround Logistics’s ranking has risen to 15th.
