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China's top express firms seeking development in capital markets


11-10-2016 01:09 BJT

Chinese package delivery company ZTO Express has raised 1.4 billion US dollars in the biggest US initial public offering of the year as its backers cashed in on China’s booming online shopping industry. The company debuted late October, the biggest by a Chinese company since Alibaba's IPO in 2014. That gave the Shanghai-based company a market value of over 12 billion US dollars.

Its Chinese competitors SF Express, YTO Express, STO Express and Yunda Express have all unveiled plans for listings in Shenzhen and Shanghai. But with a backlog of about 800 companies waiting for approval to go public in China and frequent changes to the rules, a New York listing is regarded as a quicker and more reliable way of raising funds and tapping into broader investors.

SF Express, YTO Express, STO Express and Yunda shares trade between 43 and 106 times earnings, according to Haitong Securities estimates.

"Courier business is both a labor intensive and a technology intensive business. Its development requires huge amount of capital," said Li Shaojun, chief strategist, Minsheng Securities.

"China's courier companies never set going public their ultimate goal. Getting listed is merely a way to help courier companies grow. The industry will still be growing fast in the next five years," said Lai Meisong, chairman of ZTO Express.

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