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Stock Commentary

What’s the difference between AyalaLand Logistics and AC Logistics?

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Whatâs the difference between AyalaLand Logistics and AC Logistics?

Good question, and potentially an important one going forward for those who are interested in the actual business of logistics. The main difference between AyalaLand Logistics Holdings [ALLHC 5.58 0.18%] and AC Logistics is that ALLHC is a subsidiary of Ayala Land [ALI 34.50 1.47%], and its main business is selling ALI's raw industrial land for profit.

ALLHC has very very minor warehouse holdings (compared to the income it generates when it sells that industrial land), and is regarded in the logistics industry here as being something of a second-tier player. AC Logistics seems to be the "real" logistics company in the Ayala ecosystem. I say that without any inside knowledge of what they’re doing, but I base my opinion on the hard logistics assets that they’ve been buying (with lots of growth potential). The moves that they’ve made (the Air21 Group purchase and the Glacier Megafridge JV) make me feel as though they’ve got a plan and a vision to grow this subsidiary out.

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What does it all mean, though? Again, I have no insider knowledge and I’m just reading tea leaves here, but my feeling is that Ayala Corp [AC 824.00 0.48%] might consolidate its "real" logistics businesses under AC Logistics. That might mean that ALLHC will eventually transfer its warehousing interests to AC Logistics, but perhaps only if the Ayalas don’t have a plan to form some kind of logistics-based REIT through ALLHC.

At this stage, it’s tricky to tell. If we see ALLHC acquire any additional warehouses, then I think the possibility of an ALLHC Logistics REIT is in play. If not, then I think eventually we'll see the logistics-related warehousing businesses transferred out to AC Logistics, leaving ALLHC free to continue selling raw industrial lots, its main (and most profitable) line of business.

 

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