From delivery man to one of China’s richest
Imagine if your net worth increased by $2 billion a day for the past week. That’s what happened when shares of China’s largest parcel delivery company, SF Express, made their debut and turned founder Wang Wei into the country’s third-richest man.
It’s a stark reversal for a company that got its start in what Wang has called the sneaky business of “black delivery,” back in the ’90s when only China’s post office was allowed to handle packages. The courier company he created navigated the shadows of the border between China and Hong Kong for 16 years until the government gave its sanction.
Last week’s official launch of SF Express’s so-called backdoor listing on the Shenzhen Stock Exchange, approved in December and pushed through rapidly with government support, helped produce a 59 per cent surge in shares of parent SF Holding, giving Wang a net worth $24.1 billion.
Wang and five other package delivery billionaires, including the founder of ZTO Express, which debuted on the New York Stock Exchange in October, have seen their fortunes swell based on listings in the past five months alone, amassing a combined wealth of more than $43 billion. They’re all part of the online shopping boom led by Alibaba.
That they all sought money in capital markets in such a short period, most using the quicker route of so-called backdoor listings instead of initial public offerings, points to an underlying tension: With business surging, competitors are piling in, setting up the industry for consolidation.
Yet Chinese companies are also counting on opportunity—on Jack Ma of Alibaba and his promise to President Donald Trump to create US jobs by linking 1 million American small businesses with Chinese buyers. That’s a lot of potential deliveries.
Government support for the industry has included encouraging Chinese delivery companies to seek capital through equity markets—and approving their bids to raise money quickly, through backdoor listings that involve the companies taking over others, typically in unrelated fields, that are already publicly traded. So-called reverse mergers take a year to result in access to equity.