ZTO Ex­press makes move to list in NY

China Daily (USA) - - ACROSS AMERICA - By ZHU WENQIAN zhuwen­qian@chi­nadaily.com.cn

Chi­nese ex­press de­liv­ery ser­vices provider ZTO Ex­press Co, one of Alibaba Group Hold­ing Ltd’s lo­gis­tics part­ners, has sub­mit­ted a fil­ing for an ini­tial pub­lic of­fer­ing on the New York Stock Ex­change, in a move to raise $1.5 bil­lion.

The IPO could be the sec­ond­largest by a Chi­nese firm in the United States, fol­low­ing the IPO of Alibaba that raised $25 bil­lion in 2014. ZTO Ex­press plans to use the raised cap­i­tal to ex­pand its scale, eye po­ten­tial strate­gic ac­qui­si­tions, and to es­tab­lish and pur­chase new op­er­a­tions cen­ters, trucks and fa­cil­i­ties, ac­cord­ing to its prospec­tus.

Founded in 2002, the Shang­hai-based ZTO Ex­press gen­er­ated sales rev­enues of $639 mil­lion last year, and achieved net prof­its of $115 mil­lion. The profit mar­gin hit 18 per­cent, the prospec­tus said.

With more than 23,000 branches and 74 op­er­a­tion cen­ters na­tion­wide, ZTO Ex­press’ to­tal as­sets reached $1.77 bil­lion with to­tal li­a­bil­i­ties of $412 mil­lion.

It took a mar­ket share of 14.3 per­cent in China last year. From 2011 to 2015, the com­pany net­ted a com­pound growth rate of 80.3 per­cent.

Other lead­ing Chi­nese lo­gis­tics com­pa­nies, in­clud­ing Shen­tong Ex­press and Yuan­tong Ex­press, whose profit mar­gins are be­tween 3 per­cent and 6 per­cent, have made pub­lic de­buts ear­lier on the A-share mar­ket in China through back­door list­ings.

Yang Daqing, con­tribut­ing re­searcher at the China So­ci­ety of Lo­gis­tics, said: “If ZTO Ex­press can suc­cess­fully list in the US, it will drive the growth of the Chi­nese lo­gis­tics mar­ket by lev­er­ag­ing global cap­i­tal. But, ZTO Ex­press should make full prepa­ra­tions to ad­just to modern en­ter­prise man­age­ment nec­es­sary to list in the highly free US cap­i­tal mar­ket.”

ZHANG CHUNLEI / FOR CHINA DAILY

An em­ployee of ZTO Ex­press Co de­liv­ers pack­ages for cus­tomers in Dalian, Liaon­ing prov­ince.

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