|Logen Logistics' logo|
By Anna J. Park
Logen Logistics is considering going public again thanks to the steady rise of both its corporate valuation and net profits, amid the boom in the logistics and delivery business during the global pandemic.
According to the investment banking industry, Monday, the parcel delivery company is pursuing an initial public offering (IPO) again, after two previous failed attempts in 2016 and 2019.
Since then, the delivery company has been put up for sale several times by its majority stakeholder, the Hong Kong-based Baring Private Equity Asia (BPEA), but efforts to sell the company were unrealized due to the huge difference in price.
BPEA, which had purchased Logen Logistics back in 2013 from Mirae Asset for around 158 billion won ($141 million), tried to sell its stake in the company and exit. Since it had difficulty unloading its stake, the PEF is said to have recapitalized the firm in order to recover its original invested principle. However, it has not yet been able to sell the company for a high price and exit.
But the ongoing pandemic is benefiting Logen, as the continued spread of the virus boosted demand for delivery, helping it see an increased corporate valuation. The net profit of the company in 2020 stood at 18.6 billion won, similar to the level of 2015.
Viewing that now is the "right time" to list the company, BPEA is said to have estimated Logen Logistics' corporate value to be around 400 billion won. The valuation comes, as the net profit of roughly 20 billion won is multiplied by a price-to-earnings ratio (PER) of 20, which is an average level in the logistics industry.
CJ Logistics, the number one parcel delivery company in Korea, has a market capitalization of 3.8 trillion won, with its PER standing at around 30 times, based on its stock closing last week at 171,500 won, a 20 percent jump from a year ago. Logen is the country's fifth-largest parcel delivery business as of 2020, following CJ Logistics, Hanjin Shipping, Lotte Global Logistics and ePost delivery.