(Yicai Global) Dec. 17 -- Indonesian logistics giant J&T Express has taken over the express delivery business of Chinese supply chain and logistics firm Best, in a deal worth CNY6.8 billion (USD1.1 billion). 

The agreement will allow Best to reinforce its supply chain-based logistics solutions while also significantly improving its balance sheet and profitability, according to a statement released today by the Hangzhou-based company. The deal does not involve Best’s supply chain or freight transport units or its international businesses. 

Best’s US-listed shares [NYSE: BEST] slumped more than 23 percent the day after news of the planned sale first came out on Oct. 29 and they have continued to decline, closing 4 percent lower yesterday at 88 US cents, giving the firm a market capitalization of USD342 million. 

Founded in 2007, Best went public on the New York Stock Exchange in 2017. The company has had losses in recent years due to increasingly fierce competition in China’s express delivery sector. The net loss reached USD314 million last year amid the Covid-19 pandemic, a nearly 11-fold increase. 

Revenue from Best’s express delivery business sank almost 22 percent to CNY5.1 billion (USD799.1 million) in the third quarter from a year ago, contributing 63 percent to the firm’s total income, its earnings report showed. The slump was caused by a 10.9 percent drop in the number of parcels handled and a 12 percent decline in their unit price. 

Founded in 2015, J&T Express is a Jakarta-based multinational logistics provider. It entered China in 2019 by buying Shanghai Longbang Express and then expanded rapidly amid a series of fundraisers. Its valuation has already reached USD20 billion and the company aims to get listed on the Hong Kong Stock Exchange next year. 

Editor: Tom Litting