ZTO Express makes move to list in New York
Updated: 2016-10-12 08:24
By ZHU WENQIAN(China Daily)
An employee of ZTO Express Co delivers packages for customers in Dalian, Liaoning province. [Photo by Zhang Chunlei/For China Daily]
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 second-largest 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.
Analysts said the reason that ZTO Express chose to list in the US could be related to the long queue waiting to list in China. With a faster IPO in the US, shareholders may lock in investment profits easier.
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."