Kerry Logistics Network core earnings expected to soar by 16%

It will be driven by demand in China and Asean.

According to Barclays, Kerry Logistics Network (KLN) is well positioned to benefit from increased demand for valued-added logistics services in China and the ASEAN region.

Its core earnings are expected to rise at a CAGR of 16% for 2014E-16E.

Here's more from Barclays:

We expect KLN’s 2014-16E earnings growth to be driven by the deployment of HK$4.5bn in expansion capital after KLN’s listing on the Hong Kong stock exchange in December 2013.

Increasing demand for logistics services driven by rising domestic consumption in China and increasing demand for valued-added logistics services in the ASEAN region should provide ample investment opportunities.

We expect the expansion of logistics centres in Asia and increased global freight forwarding footprint to drive revenue to rise at a CAGR of 10% for 2014E-16E.

Furthermore, we expect KLN’s gross margin to expand from 14.4% for 2013 to 15.2% for 2016E as the company leverages the increased scale of its logistics infrastructure to provide more value-added services for its customers.

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