Kevin Smith, of Delft Partners and portfolio manager of the TAMIM Asia Small Companies Fund, highlights one of the stocks in the Asia Small Companies portfolio. Kerry Logistics Network Limited (KLN.SEHK) is a diversified group based in Asia with core businesses that encompass integrated logistics, international freight forwarding, express, supply chain solutions, seaport management and operations as well as insurance brokerage. KLN operates under two master brands: Kerry Logistics, a logistics service provider with extensive operations across the globe and Kerry Express a business offering last-mile delivery to B2C, B2B2C and C2C customers. KLN has more than 47,000 employees in 53 countries and territories worldwide. The Company is listed on the Main Board of the Hong Kong Stock Exchange and is a selected Member of the Hang Seng Corporate Sustainability Index Series 2017-2018. Accounting, Strategy and Governance Comments Accounting
Strategy
Governance
Value, Momentum and Quality Comments KLN sits in the top decile of our VMQ ratings universe. The P/E ratio of 5.6x in the current year is distorted by the sale of warehouse assets in Hong Kong, the prospective P/E in 2020 is 10.2x which offers good value especially in the context of KLN’s growth prospects. The quality score for KLN is average, largely because of the gearing levels in the balance sheet. We view the gearing as appropriate for KLN’s business model and evidence of a company that is prepared to invest for the future. We view the risk level of the balance sheet as acceptable.
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