ZTO Express makes 2016 biggest IPO in NYSE debut

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Chinese delivery service provider ZTO Express raised over 1.4 billion U.S. dollars in its initial public offering (IPO), after it started trading under the stock ticker "ZTO" at the New York Stock Exchange (NYSE) Thursday. 

It was the largest U.S. IPO so far this year by a Chinese company after the home-grown e-commerce giant Alibaba raised some 21.8 billion U.S. dollars in 2014. 



The stock market debut gave the Shanghai-based company a market value of over 12 billion U.S. dollars. 

ZTO Express wants to take a share in the global largest delivery market and raise more capitals to expand its market by trading in NYSE. 

According to its prospectus, 720 million U.S. dollars of the IPO proceeds will be used to buy more lands, facilities, equipment and trucks. 

"Domestic delivery service, as we predict, will keep a fast growth in the next five years. By 2020, [the market value of domestic delivery service] will triple that in 2015. Chinese delivery service must speed up its capacity building to match up with the market, which will be our main investment," said Lai Meisong, founder and chairman of ZTO Express. 

ZTO, a Shanghai-based express delivery company, provides express delivery service as well as other value-added logistics services through its extensive and reliable nationwide network in China, which covers over 96 percent of China's cities and counties as of June 30, 2016. 

"Comparing with the U.S. counterpart, China's delivery services still have a long way to go in terms of technology and equipment. We will introduce more vehicles and encourage automated sorting. Robots may be introduced. Meanwhile, we will invest more on information technologies and mergers and acquisitions," said Lai. 

ZTO priced its initial public offering of 72,100,000 American depositary shares (ADSs) at 19.50 dollars per share, higher than its previously indicated range of 16.50 dollars to 18.50 dollars. 

That price is about 27 times its expected 2017 earnings per share, according to people familiar with the company's financial situations.