Logistics firm ZTO Express has filed its intent for an initial public offering in the coming weeks with the New York Stock Exchange in what could be the largest U.S. IPO for a Chinese company since e-commerce giant Alibaba's $25 billion IPO on the NYSE two years ago, according to Reuters.
ZTO Express — which derived 75% of its business during the first half of 2016 delivering parcels for Alibaba, The Wall Street Journal notes — expects to sell about 72.1 million American depositary shares priced between $16.50 and $18.50 to raise as much as $1.5 billion, and wants to use the IPO windfall to expand its truck fleet and grow capacity through real estate purchases, among other endeavors.
ZTO Express handled about 14% of the 21 billion packages delivered overall last year in China, the world's largest express delivery market, according to iResearch figures from the company's prospectus.
ZTO's IPO also could be the biggest one this year in the U.S. financial markets, and comes at a time when IPO activity seems to be increasing late in what has been a slow year. The number of IPOs this year is down more than 40% from this time a year ago, while the amount of money raised from IPOs this year is down almost 50% from 2015.
Yet if Alibaba is any indication, very large Chinese companies can find success going public in the U.S., which presents a much less complicated path to payoff than the red tape-entwined IPO process in China. Also, the worldwide market for logistics, shipping and especially express package delivery is very hot right now, and ZTO is right in the middle of the biggest single-country market.
Other major players in the Chinese logistics space include Shanghai STO Express Co., Shanghai YTO Express (Logistics) Co. and Yunda Ltd..
China, of course, has not escaped the attention of the logistics firms of the Western world, many of whom see it as significant to their overall strategies for supporting the growing cross-border e-commerce market. Amazon has been busy this year edging into logistics and package delivery in a variety of ways, and is just one example of a Western firm with its heart set on shipping in and out of China.