PE-backed ZTO Express files for US IPO

The filing does not specify the size or pricing of the offering. ZTO issued and sold about 38.2 million shares for $300 million last year to its four series A investors, which include Sequoia, Warburg Pincus, Standard Chartered Private Equity and Hillhouse Capital. The majority of this issue was purchased by Warburg Pincus.

ZTO was founded in Shanghai in 2002 as a regional parcel delivery company. A logistics partner of The Alibaba Group, it has since expanded its footprint to cover 96% of China's cities with a range of services targeting the e-commerce and printing industries. It claims the fastest growth rate among the five largest Chinese express delivery companies as of the end of 2015, with parcel volumes growing at a compound annual rate of 80.3% from 2011 to 2015.

Parcel volumes for the six months to June totaled about 1.9 billion, representing a 58% year-on-year increase for the period. In terms of parcel volumes, the company had 14.3% market share in China's express delivery space, according to iResearch. Revenue increased from RMB3.9 billion ($585 million) in 2014 to RMB6.1 billion in 2015. Operating profit reached RMB1.5 billion in 2015, up from RMB600.3 million the previous year, while net income climbed from RMB406 million to RMB1.3 billion over the same period.

China is believed to be the world's largest express delivery market, with a total parcel volume of 20.7 billion items in 2015, or about 1.5 times that of the US. The domestic logistics sector is benefiting from a fast-growing e-commerce market, which is estimated to be worth $609 billion compared to $342 billion in the US. About 70% of Chinese parcels were delivered as a result of e-commerce purchases, compared to 50% in the US.

The IPO extends a string of recent planned liquidity events for Chinese logistics companies. This includes two reverse mergers in Shenzhen by SF Express and YTO Express.

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• Topics
• Central Asia
• Support services
• Consumer
• IPO
• China
• USA
• Logistics
• Warburg Pincus Asia
• Sequoia Capital
• Standard Chartered Private Equity
• Hillhouse Capital Management
• Exit