(Yicai Global) Aug. 25 -- Deppon Logistics, a Chinese delivery service provider that may delist its shares after JD.Com completes its acquisition of the firm, reported a more than fivefold profit increase in the first half due to subsidies and tax breaks.

The first-half net profit surged to CNY94.3 million (USD13.8 million) from CNY15.7 million a year ago, the Shanghai-based company said in its earnings report yesterday. Meanwhile, revenue slid merely by 0.6 percent to CNY14.8 billion (USD2.2 billion), mainly due to the impact of the Covid-19 pandemic across the country. Total expenses decreased by 7 percent to CNY1.6 billion.

Deppon's stock price [SHA: 603056] climbed by 0.5 percent to close at CNY13.19 (USD1.90) with a market capitalization of about CNY13.5 billion. The shares have gained 29 percent this year, driven by JD.Com's privatization offer.

The less-than-truckload delivery company is in the process of being acquired by the e-commerce giant. Deppon, which has not been able to grow its small parcel delivery business as expected, could complement the Beijing-based firm's logistics network for big orders.

Deppon has failed to establish a dominant position after entering the express delivery industry and its market share is declining so it is facing operational pressures, logistics expert Yang Daqing said to Yicai Global earlier.

The delivery company's equity may stop trading. On Aug. 2, JD.Com launched a tender offer for Deppon's remaining shares at a price of CNY13.15 apiece and if public shareholding falls below 10 percent as of Aug. 31, the equity will be delisted. In March, the online marketplace bought a company to indirectly control 66.5 percent of Deppon's shares.

Founded in 1996, Deppon has transformed to increasingly focus on large parcels over the years. In the first half, its express delivery revenue rose by 7 percent to CNY9.8 billion (USD1.4 billion) from a year ago. Meanwhile, its freight business income fell by 13 percent to CNY4.6 billion, according to the earnings report.

Editors: Dou Shicong, Emmi Laine, Xiao Yi