(Yicai Global) June 5 -- Shares of Milkyway Chemical Supply Chain Service fell after the Chinese provider of hazardous chemical logistics and warehousing services said it plans to buy a Singaporean peer for SGD38 million (USD28.1 million), its second such acquisition in two months.
Milkyway [SHA: 603713] closed 2.3 percent lower at CNY84.05 (USD11.87) a share today, extending its decline to more than 30 percent this year. The benchmark Shanghai Composite Index ended little changed.
Milkyway's Singapore unit MW-SG has inked a deal with LHN Group's controller to acquire the real estate management service provider's 84 percent stake in LHN Logistics, the Shanghai-based firm said late yesterday. As LHN Logistics is listed on the Singapore Exchange’s Catalist board, a tender offer of 23 Singaporean cents (17 US cents) per share will be sent to other shareholders by Aug. 3, it added.
The acquisition will give Milkyway more storage space and boost its transportation and container services for chemical materials in the Asia-Pacific region, according to the firm.
Shares of LHN Logistics [STI: GIH] soared 28 percent to 22 Singaporean cents apiece today, bringing its market capitalization to SGD36 million.
On April 3, Milkyway said it will buy Store Deliver Logistics for SGD22 million. Certified by the Singaporean government, the firm mainly stores oil refining products, specialty chemicals, and liquid chemicals.
Singapore is the investment destination and export hub of many chemical companies, Milkyway said at the time, noting that Jurong Island, where Store Deliver Logistics is based, is home to world-leading energy and chemical companies, with an every-growing need for warehousing. Warehouse rents in Jurong are expected to significantly rise in the future, it pointed out.
Established in 1998, Milkyway is a leading professional integrated services provider in China’s chemical supply chain, seeking to to become a "global super chemical Amazon." It mainly provides integrated logistics services with freight forwarding, warehousing, and transportation, as well as chemicals distribution based on integrated logistics services.
Milkyway's operating income jumped 34 percent to CNY11.6 billion (USD1.6 billion) last year from 2021. Net profit soared 40 percent to CNY600 million (USD84.4 million).
Editor: Martin Kadiev