Chinese package delivery company ZTO Express said it raised US$1.4 billion in the biggest US initial public offering of the year on Wednesday as its backers cashed in on China’s booming online-shopping industry.
The stock market debut, the biggest by a Chinese company since the US$25 billion IPO of e-commerce giant Alibaba Group Holding in 2014, gave the Shanghai-based company a market value of more than US$12 billion.
ZTO’s US listing is a head start over rivals in the world’s largest express delivery market because it gives the company faster access to cash to expand.
The company wants to use US$720 million of its IPO proceeds to buy more trucks, land, facilities and equipment.
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 a broader mix of investors.
ZTO’s existing shareholders, including private equity firms Warburg Pincus, Hillhouse Capital and venture capital firm Sequoia Capital will also get much more leeway and flexibility to exit their investment under US market rules. In China, they would be locked in for one to three years after the IPO.
ZTO priced 72.1 million shares at US$19.50 a share, above its previously indicated range of US$16.50 to US$18.50 a share.