STO Express poised to become first among peers to list
Talks with plumbing company could lead to back-door listing in Shenzhen for express delivery firm
STO Express may beat Alibaba-owned YTO Express to become mainland’s first listed express delivery company by way of a back-door listing, as the burgeoning industry’s key players compete for everything from market share to aviation licences and access to capital.
Shenzhen-listed Zhejiang IDC Fluid Control, a plumbing company whose shares have been suspended since late August pending restructuring talks, said in a notice to the exchange on Tuesday night that STO Express had become a new potential subject of transaction, and that the two firms had signed a framework agreement regarding the issue of shares for asset acquisition – usually the first step for a back-door listing, where a private company takes a short cut to trading by acquiring a public company.
The announcement gave no details on the time frame or the extent of acquisition planned.
The news comes as registration records reveal that STO’s rival YTO Express completed an ownership restructuring last month and introduced two Alibaba-affiliated directors to a board of nine, a sign that YTO is readying itself for an initial public offering.
The mainland’s express delivery companies have grown at an annual rate of 30 per cent in the past five years in tandem with the exponential growth of the e-commerce market. Major players SF Express, YTO Express, STO Express, ZTO Express and Yunda Express have been sought after by investors keen to bring them to the capital market, though their ownership structure remains a thorny issue, with some company founders ambivalent about going public.
Alibaba and Yunfeng Capital, a fund created by Alibaba chairman Jack Ma Yun, announced in May that they had acquired an undisclosed stake in YTO Express. Market insiders believe it is 20 per cent.