Announcement of Business Collaboration and Capital Alliance with GD Express Carrier Berhad of Malaysia

(Accelerate Asian Strategy by Strategic Investment in South East Asia)

The Board of Directors of Yamato Holdings Co., Ltd. (Yamato Group, Head office: Japan, Representative Director: Masaki Yamauchi) at the meeting on January 21, 2016, has approved the business collaboration and capital alliance with GD Express Carrier Bhd. (GDEX, Head office: Malaysia, CEO: Teong Teck Lean), one of the leading parcel delivery companies in Malaysia.

  1. Background
    1. Yamato Group, introducing TA-Q-BIN services in Asian areas since 2010, have set out to provide the high quality and high value-added transportation service in which parcel delivery, logistics, and freight forwarding functions are integrated.
    2. With prospective benefits from both TPP and AEC, it is highly expected that a demand for South East Asia’s intra-regional trade will be exponentially increased. By providing cross-border transportation services which is integrated with last-one-mile network throughout this region, we would like to promptly build a strong position in the market.
    3. To accelerate Yamato Group’s growth in this region, we will actively make business alliance and execute cross-border M&A to establish parcel delivery network across ASEAN and to enhance freight forwarding and logistics functions.
  2. Main purpose of the business collaboration and capital alliance
    1. This alliance is a part of our comprehensive approach to accelerate Asia-centered strategy, and our first approach is to expand parcel delivery network in Malaysia.
    2. GDEX is a Malaysian logistic company listed in the KLSE with the second largest market share in the parcel delivery service industry. The company has established a nation-wide network for parcel delivery services in Malaysia, and achieved the highest profit margin in the industry. The company also managed to achieve significant growth in the B to B parcel delivery sector, having achieved huge growth compared to the other industry players.
    3. Yamato Holdings has a subsidiary in Malaysia, Yamato Transport (M) Sdn Bhd (YTM) which is also offering parcel delivery services “TA-Q-BIN” in Malaysia. In addition, YTM also offers chilled and frozen parcel delivery services “Cool TA-Q-BIN” and Cash-On-Delivery (COD) services “TA-Q-BIN Collect” in Malaysia. Its business is also achieving smooth growth in the country.
    4. Going forward, GDEX and Yamato Holdings believes that, a stronger partnership formed via business collaboration and capital alliance will enable both parties to capitalize on each other’s strengths, and together expand to become the leading delivery company in Malaysia.
  3. The key salient points of the business collaboration
    1. Business collaboration – The scopes
      • For the routes or areas not covered by YTM at the moment, YTM will cooperate with GDEX to leverage on GDEX’s extensive network to offer wider coverage for YTM’s customers.
      • Cooperation on the linehaul operation between major centers to further improve efficiencies.
      • Collaboration between both companies on cross border logistics between Malaysia and Singapore will be implemented.
      • Collaboration on the business development in the ASEAN region.
    2. Capital Alliance
      Yamato Asia Pte. Ltd. (Yamato Asia, a 100% subsidiary of Yamato Holdings Co., Ltd.) is scheduled to subscribe to the new shares by GDEX. Upon completion of the subscription, Yamato Asia has the intention to acquire additional shares of GDEX for up to a total shareholding of 23% in the future.
      • Total subscription amount: Ringgit Malaysia 217,314,774.00 (RM 1.74 per share) Shareholdings after subscription: 9.1%

      • Yamato Asia will nominate one Director to GDEX’s Board.

  4. Company profile of Yamato Asia
    Name Name Yamato Asia Pte Ltd
    Address Address 223 Mountbatten Road #01-07/08, Singapore 398008
    Managing Director Richard Chua Khing Seng
    Major Business Regional Head Quarters for ASEAN region
    Paid-in Capital S$ 91,761,364
  5. Company profile of GDEX
    Name GD Express Carrier Bhd.
    Address No. 19, Jalan Tandang 46050 Petaling Jaya, Selangor Darul Ehsan Malaysia
    Managing Director Teong Teck Lean
    Major Business Parcel Delivery Business, and other related business
    Paid-in Capital RM 61,816,413 as of January 20, 2016
    Date of Foundation 1996
    Shareholders GD Express Holdings (M) Sdn. (30.60%) 
    Affin Hwang Nominees (Asing) Sdn. Bhd. (26.66%)
    HSBC Nominees (Asing) Sdn. Bhd.(11.08%) 
    Lau Wing Tat  (4.25%)
    Leong Chee Tong   (3.13%)
    Fiscal year ended June 2013 June 2014 June 2015
    Total Equity 65,071,346RM 97,351,010RM 141,359,818RM
    Total Assets 107,097,747RM 139,777,274RM 189,185,700RM
    Net assets per share 0.25RM 0.12RM 0.11 RM
    Revenue 135,153,851RM 158,702,731RM 196,751,424RM
    Profit before tax 19,254,981RM 24,271,686RM 31,306,481RM
    Profit for the year attributable to Owners of the Company 13,616,260RM 23,384,694RM 28,296,200RM
    Earnings per ordinary share 1.73 sen 2.15 sen 2.43 sen
    Dividends per share 1.125 sen 1.125 sen 1.000 sen
  6. Schedule going forward
    1. Board of Directors Approval date : January 21, 2016
    2. Subscription Date for the New Issue of shares : January 21, 2016 (tentative)
    3. Payment date for the New issue of shares : January 29, 2016 (tentative)
    4. Registration of the New shares in Yamato-Asia’s name : February 10, 2016 (tentative)
  7. Impact
    This transaction will not have material impacts on the consolidated financial results of Yamato Group for the financial year ending March 2016.