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SF Express boss Wang Wei’s net worth jumps US$2.4b in one day as shares continue to soar

Wang Wei swaps spots with Tencent’s Pony Ma to become third richest man in China - at least for a day

PUBLISHED : Tuesday, 28 February, 2017, 8:15pm
UPDATED : Wednesday, 01 March, 2017, 10:28am

SF Express, dubbed “China’s Fedex”, saw its shares surge by the daily limit of 10 per cent Tuesday for a fourth straight session, pushing the total net worth of its chairman Wang Wei’s to 180.4 billion yuan (US$26 billion), helping him unseat Tencent’s Pony Ma Huateng to become the third richest man in China.

The courier service company, which went public on Friday through a reverse acquisition of a listed shell company, rose limit-up by 10 per cent Tuesday to close at 66.8 yuan in Shenzhen.

The company’s total market cap jumped to 279.5 billion yuan, making it the most valuable stock on the Shenzhen Stock Exchange. In mainland Chinese markets as a whole, SF Express was the 21st biggest company by market cap.

Nonetheless, the company has a small public float of 130 million shares, only 3.2 per cent of its total issued share capital. Public float refers to shares that are available for trading in the public market, as opposed to locked-in stocks held by other parties.

Therefore, its free-float market cap only stood at 8.5 billion yuan as of Tuesday.

Tuesday’s trading turnover for SF Express was also relatively small, reaching 836 million yuan.

Still, company chairman Wang, who founded SF Express in 1993 and currently owns a 64.58 per cent stake, was a big winner.

As a result of Tuesday’s stock surge, Wang’s net worth, measured by his stock holdings, jumped by 16.4 billion yuan (US$2.4 billion) in a single day to 180.4 billion yuan (US$26 billion).

Wang swapped spots with Tencent’s Ma to become China’s third richest man, while Ma slipped to fourth place with a current net worth of US$24.3 billion, according to data from Forbes’ realtime wealth rankings.

Wang is still behind Dalian Wanda Group chairman Wang Jianlin and Alibaba’s chairman Jack Ma, who boast a net worth of US$31.4 billion and US$28.8 billion respectively.

However, analysts were sceptical about whether SF Express’ stock momentum can continue.

“The valuations of SF Express are too high. The total market cap has exceeded 250 billion yuan, while its average annual profit is only between 2 billion to 2.5 billion,” said Ya Lei, an asset manager at Beijing-based Ziye Investment Company.

Based on last year’s profit figures, the stock’s price-earning ratio had reached more than 66 times by Tuesday’s market close.

“Besides, the delivery service sector doesn’t have exceptionally high growth potential, and their industry valuations are also too high. I don’t think the momentum in SF Express will continue,” Ya said.

Analysts from Great Wall Securities believe the stock, which only has a small number of shares floating in the public market, was mainly driven by speculative bets.

“The A share market is highly speculative. Money likes to speculate on stocks and push up valuations to stretched levels. However, many retail investors will still follow suit, as they don’t look at valuations,” they said in a note on Tuesday.

In a company statement on Tuesday, SF Express said it was aware of the “unusual stock price fluctuations” in the past few days.

However, the company doesn’t have “undisclosed material information” that needs to be revealed or “any big change in its operating conditions”, the statement said.

Last week, SF Express issued a preliminary earnings estimate and said its 2016 net profit jumped 112 per cent year on year to 4.18 billion yuan.

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