(Yicai Global) May 20 -- China Eastern Airlines is poised to become the first of China’s big three carriers to list its fast-growing cargo services affiliate. Its rivals are also expected to pursue initial public offerings for their logistics units.

Eastern Airlines Logistics will issue no more than 159 million shares in its initial public offering on the Shanghai Stock Exchange early next month, the Shanghai-based airline's affiliate said in its prospectus yesterday, just days after it received regulatory approval from the China Securities Regulatory Commission.

Preliminary price inquiries may begin tomorrow and pre-IPO placement can start on May 26.

Founded in 2012, EAL was formed through the restructuring of cargo assets belonging to China Eastern Air Holding, the parent of China Eastern Airlines. In 2017, EAL introduced external investors and the parent's stake in it fell below 50 percent from 100 percent, yet remaining the largest shareholder.

Global air freight traffic has surged amid the Covid-19 pandemic despite the decreasing number of passenger flights. Hence, companies with many cargo planes have become increasingly profitable.

Air China and China Southern Airlines have also attracted outside investors for their air freight arms and may follow EAL's lead to seek IPOs, Yicai Global learned.

EAL will use the raised funds from its listing for infrastructure projects, including building an air logistics center in Shanghai's Pudong New Area, upgrading cargo network and information technologies, buying spare engines, as well as boosting research and development efforts.

EAL was doing much better than its passenger flight affiliate last year. The firm's net profit more than tripled to CNY2.4 billion (USD372.7 million) from a year ago, according to its prospectus. Revenue surged 34 percent to CNY15.1 billion (USD2.3 billion). Meanwhile, China Eastern Airlines recorded a net loss of CNY11.8 billion.

In the first half of 2021, EAL expects its net profit to tally from CNY1.42 billion to CNY1.74 billion, rising from a year ago.

Editor: Tang Shihua, Emmi Laine, Xiao Yi