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3 Charts Showing Kerry Logistics Network’s Phenomenal Growth

Kerry Logistics Network Ltd (SEHK: 636) is a global logistics company listed in Hong Kong. The company was spun off from property giant Kerry Properties Limited (SEHK: 683) in 2013.

Since then, Kerry Logistics has seen steady growth in both revenue and profit and has been able to reward shareholders by increasing its dividend.

Growing its topline

Kerry Logistics divides its operations into (1) logistics operations, (2) international freight forwarding and (3) Hong Kong warehouse. The latter two are where the bulk of its revenue comes from and both these segments have seen steady growth over the years.

The chart below shows the revenue breakdown by segment from 2015 to 2018.

Source: Kerry Logistics 2018 Annual Report

As you can see, total revenue has been on a steady upward trend, with both its core operating segments showing strong growth each year.

Trickling down to earnings

Equally importantly, the revenue growth has translated to an increase in its earnings. Between 2015 to 2018, profit grew at an annualised rate of 7.4% from HK$1,997 million (US$252.2 million) to HK$2,660 million.

The chart below illustrates the segmental profit breakdown.

Source: Kerry Logistics 2018 Annual Report

One thing worth noting is that its warehouse segment contributed a significant amount of profit despite only accounting for a small part of its revenue. 

Rewarding shareholders

Finally, the growing earnings per share have enabled management to reward shareholders by increasing dividends each year.

The chart below shows the dividend per share over the last four financial years.

Source: Kerry Logistics 2018 Annual Report

From the chart, we can see that dividends have grown from 16 HK cents per share in 2015 to 37 HK cents per share in 2018. Even after stripping away the special dividend declared in 2018, that translates to a healthy 11.8% annualised growth in dividends.

Foolish bottom line

Kerry Logistics has been the epitome of consistency over the last few years. The company has ridden on the coattails of the expanding prevalence of e-commerce and the increased trade from Mainland China to other Southeast Asian countries. In fact, despite the talk of a slowdown in trade, its international freight forwarding business recently grew 22% in the first half of 2019.

Although there is some uncertainty regarding the near-term outlook in China and Hong Kong due to the ongoing trade war and political turmoil, the company – with its presence in over 53 countries and growing network of logistics assets in Southeast Asia – will likely be able to ride out any economic slowdowns in the region.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Jeremy Chia doesn't own shares in any companies mentioned.