CJ Logistics Corp., the logistics arm of South Korean conglomerate CJ Group, is seeking to help shore up the finances of its parent company by cashing out of its Chinese unit CJ Rokin while its value has more than doubled during the pandemic crisis.

CJ Logistics said the stake sale “is under review” as part of plans to reorganize its Chinese portfolio but denied it was downsizing or phasing out in China.

The Korean company acquired a 71.4 percent stake in China’s largest refrigerated and frozen transport firm Rokin for 455 billion won ($393.6 million) together with STIC Investments in 2015. CJ Logistics has since trimmed its holdings in the Chinese unit to 38.1 percent.

CJ Logistics’ shares rose 0.55 percent to finish Thursday at 184,000 won.

CJ Rokin has an extensive network connecting 1,500 cities across China, with 48 logistic centers boasting warehouse space totaling 1 million square meters. It posted 674.1 billion won in revenue last year, up 1.6 times from five years ago when it went under CJ Logistics.

Market experts estimate the value to be around $1 billion, given the explosive demand for fresh and frozen food products in China amid the coronavirus pandemic.

“Net proceeds from the sale are projected to be $380 million and capital gains for CJ Logistics estimated at $120 million, a handsome amount that is likely to help improve its finances,” said Ryu Je-hyun, analyst at Mirae Asset Daewoo.

CJ Group has been unloading its non-core and unprofitable operations to reorganize its businesses into three key areas – food, retail and media – centered on CJ CheilJedang, CJ Logistics and CJ ENM.

CJ Foodville, the dining service unit of CJ Group, is currently in talks to sell its Tous Les Jours bakery chain. Speculations also continue to swirl around additional sales involving CJ Foodville, the cinema chain CJ CGV and home shopping network CJ O Shopping.

By Kim Hyo-hye, Park Dae-eui and Kim Hyo-jin

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