Best to list delivery businesses in Hong Kong

HONG KONG: Alibaba-backed Best is seeking a Hong Kong listing for its express delivery and freight delivery businesses, keen to boost its valuation and establish an investor base closer to China, said three sources with knowledge of the mater.

The plans by Best, which went public in New York in 2017 and has a market value of $1.8 billion, are preliminary and the offering size and target valuation have yet to be determined, said the sources, speaking on condition of anonymity as the information was private.

The Hangzhou-based company, which has been unhappy with its New York valuation, decided not to include smaller units such as its supply chain management and cloud businesses in the Hong Kong listing as seeking a valuation for just the two delivery units would be more straighforward, one of the sources said

The two units brought in nearly $4 billion in revenue last year, around 80% of the company’s overall revenue.

The move also comes amid escalating geo-political tensions between the United States and China and tightening scrutiny of Us-listed Chinese firms. Those uncertainties have prompted a number of Chinese companies to seek a second listing in Hong Kong. Best has tapped Credit Suisse and Jpmorgan to lead the listing process, said the sources. One source said the float could take place as soon as this year. Best and the banks declined to comment.

Alibaba Group Holding, Best’s biggest shareholder, has endorsed the listing plan and would also consider investing in the float, said one of the people.