Morningstar

Kerry Logistics Network Ltd 00636

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Stock XHKG Rating as of
HK$8.37 +0.36 (4.49%)
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As of Delayed Price Closed

Company Report

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Kerry Logistics Network Earnings: Second-Half Profit Will Be Stronger Sequentially; Valuation Intact

Chelsey Tam

We think Kerry Logistics Network’s, or KLN’s, 10% year-on-year increase in revenue and 11% growth in operating profit (excluding fair value change of investment) in the first half are on track to meet our full-year estimates, as we expect second-half results to grow further sequentially. We find management’s outlook encouraging. As such, we maintain KLN’s fair value estimate at HKD 10.80 per share, representing a 10.6 times 2024 price/earnings ratio. We think KLN remains undervalued at a price/earnings ratio of 7.5 times as of Aug. 28 versus above 10 times from 2015 to 2020 before the large jump in market valuation due to covid-19 logistics shortages.

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Price vs Fair Value

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00636 is trading at a 169% premium.
Price
HK$8.37
Fair Value
HK$85.80
Uncertainty
High
1-Star Price
HK$59.21
5-Star Price
HK$4.88
Economic Moat
Qtx
Capital Allocation
Yvzkkzjrc

Bulls Say, Bears Say

Bulls

More or faster-than-expected cooperation between KLN and SF is implemented, boosting revenue and reducing costs for KLN.

Bears

Sales and/or operational integration with SF is limited or delayed, hurting revenue and profit growth at KLN.

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Trading Information

Previous Close Price
HK$8.01
Day Range
HK$8.03–8.41
52-Week Range
HK$6.44–9.67
Bid/Ask
HK$8.31 / HK$8.37
Market Cap
HK$15.13 Bil
Volume/Avg
1.5 Mil / 652,340

Key Statistics

Price/Earnings (Normalized)
10.66
Price/Sales
0.33
Dividend Yield (Trailing)
2.75%
Dividend Yield (Forward)
2.75%
Total Yield
2.75%

Company Profile

Kerry Logistics Network, or KLN, is a leading Asian diversified logistics service provider with a global presence. KLN is the number one non-vessel operating common carrier, or NVOCC, by volume for transpacific trades in 2022. Its business consists of international freight forwarding (air freight, ocean freight, and cross-border road freight forwarding services), integrated logistics mainly across Asia, and e-commerce and express delivery services. KLN has been majority owned by and consolidated under the international segment of China’s leading logistics company S.F. Holding, or SF, since September 2021.
Sector
Industrials
Industry
Integrated Freight & Logistics
Stock Style Box
Mid Value
Total Number of Employees
18,600
Website
https://www.kln.com

Competitors

Valuation

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Metric
00636
DHL
EXPD
Price/Earnings (Normalized)
 10.6614.7924.37
Price/Book Value
 0.972.138.33
Price/Sales
 0.330.592.05
Price/Cash Flow
 5.636.2023.48
Price/Earnings
00636
DHL
EXPD

Financial Strength

Metric
00636
DHL
EXPD
Quick Ratio
 1.440.721.44
Current Ratio
 1.470.901.71
Interest Coverage
 4.196.02—
Quick Ratio
00636
DHL
EXPD

Profitability

Metric
00636
DHL
EXPD
Return on Assets (Normalized)
 1.94%4.51%15.77%
Return on Equity (Normalized)
 4.83%13.29%30.64%
Return on Invested Capital (Normalized)
 3.86%7.69%23.44%
Return on Assets
00636
DHL
EXPD

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