Logistics Parks Logistics Service Business Logistics Park Transformation and Upgrading Business

The Group affirms its core strategies of developing Integrated Logistics Hubs and advocating development that embraces both asset light and asset heavy models accordance with of the "13th Five-Year" Strategic Plan. Therefore, building on its network of integrated logistics hubs, the Group effectively strengthened its competitiveness in the logistics industry by increasing its efforts in the development of value-added logistics service and a logistics ecosystem.

Through investment in quality asset-light projects and innovation in business model, the Group conducted business development that embraces both asset-light and asset-heavy business models and actively explored value-added logistics services, including setting up a joint venture with Evergrande Agri-Husbandry Group Co., Ltd(恒大農牧集團有限公司)to provide the latter with comprehensive supply chain management services, partnering with DHL to provide intelligent warehouse construction and operation services for Huawei, establishing drop and pull connection services for the Yantai-Dalian shipping line, developing a paperless shipping service across the ports of Shenzhen, and expanding seaport business in Nansha of Guangzhou and Tianjin.

The Group actively explored the smart warehouse business and formulated a sub-strategy for the development of smart warehouses at the end of 2019, pursuant to which it strives to establish demonstrative and pilot smart warehouses at its logistics parks and conducting investments in, and mergers and acquisitions of, outstanding enterprises along the industry chain in an orderly manner. In 2020, for the business development, whilst ensuring the smooth operation of Huawei’s smart warehouse, Hangzhou Integrated Logistics Park successfully invited Ruhnn, the No. 1 brand in the KOL marketing of e-commerce industry in China, to apply Whalehouse’s Picking Spider System (PSS) to enhance the utilization rate of its storage space by 6 times, thereby increasing rental income per square meter by 4 times. On the other hand, South China Logistics Park upgraded and revamped the smart warehouse of Pedder Logistics, an existing client, using the intensive storage technology with 4-direction shuttles. Following this upgrade, the same volume of service can be delivered with 10,000 instead of 20,000 square meters, thereby releasing storage space for rent by other clients. In addition, the smart medical warehouse in Shijiazhuang, the “smart + cold chain” warehouse in Liguang Project and several other projects are currently under construction and will soon be put into operation. In respect of investment, merger and acquisition projects, the Group is currently working on several potential projects. The Group has already completed a strategic investment in Hubei Prolog Technologies Co., Ltd.(湖北普羅勞格科技股份有限公司), a leading company in the field of smart warehouse system integration, thereby taking the first step in its equity investment in the smart logistics industry and laying the solid foundation for the future development of the smart storage business.

Shenzhen EDI Co., Ltd.

Shenzhen Total Logistics Service Co., Ltd.

updated 15 July 2021