China Southern Airlines is considering listing its cargo business on the Hong Kong Stock Exchange after dropping earlier plans for a Shanghai IPO. The potential move, still in early discussions, could raise several hundred million US dollars, according to sources familiar with the matter. This shift comes at a time when China’s trade ties with the United States are under strain, affecting the country’s export-driven industries. China Southern, which plays a key role in China’s aviation and logistics, has not yet confirmed the IPO plans.
China Southern Reconsiders IPO Strategy
China Southern Airlines, one of the largest airline groups in the world, is now rethinking where it wants to list its cargo unit, China Southern Air Logistics. Originally, the company planned to list the unit in Shanghai. However, in February, it canceled those plans, citing changes in market conditions.
According to insiders, the company is now exploring a Hong Kong listing. The discussions are still at a very early stage. The proposed IPO could bring in hundreds of millions of dollars, but no final decision has been made. When contacted, China Southern declined to comment on the matter.
Timing Challenges Due to US-China Trade War
This IPO plan comes during a tough time. China’s exports, a major part of its economy, are facing problems due to ongoing trade tensions with the United States. Many Chinese firms that rely on exports have been hit hard by US tariffs. Since China Southern’s cargo business heavily depends on global shipping, the trade war is a big concern.
While other companies are moving forward with IPOs in Hong Kong, most of them are not directly impacted by US trade policies. This adds a layer of uncertainty to China Southern’s potential deal.
Cargo Unit Performance Has Declined
Even before the trade war, China Southern’s cargo division was facing challenges. The company’s 2023 financial report shows a 23% drop in sales and a 48% drop in profits compared to the previous year. These numbers suggest that the cargo business has been struggling for some time.
The slowdown in China’s economy has also played a role. Lower consumer demand, fewer exports, and rising costs have all made things harder for the logistics sector.
China Southern’s Scale and Reach
Based in Guangzhou, China Southern Group is a major player in the aviation industry. It owns stakes in 10 different airlines and operates a total of 932 commercial aircraft. In 2024, the company transported 165 million passengers and handled 1.8 million tonnes of cargo and mail, making it one of the largest carriers in Asia.
Despite the cargo unit’s challenges, the parent company remains a strong force in global aviation. This could help attract investors, even during uncertain economic times.
Hong Kong’s IPO Market Sees Mixed Signals
Hong Kong’s IPO market has shown signs of recovery in 2025. According to Bloomberg Intelligence, listings were expected to double to US$22 billion this year—before US tariffs added more pressure to global markets.
Big companies like Contemporary Amperex Technology Co. Limited (CATL) have managed to go ahead with their IPOs, despite the tough conditions. This suggests that while the market is shaky, there is still room for strong brands to attract funding.
Still, China Southern’s cargo IPO might face more scrutiny due to its exposure to international trade dynamics.
What This Could Mean for Investors
If the IPO goes forward, it could offer investors a rare chance to invest in a major cargo airline. However, they’ll need to weigh the risks. Global demand for shipping is uncertain, and rising geopolitical tensions may impact growth.
Experts suggest watching how China manages its export policy and trade talks with the US. These factors will likely shape how well the cargo business performs in the near future.
