China Postal Express & Logistics Co., Ltd, the express and logistics service arm of state-owned China Post, will introduce strategic investors and initiate an initial public offering (IPO) next year to ensure its going public within three years, news agency Xinhua quoted Liu Aili, chairman of China Post, as saying.
China Postal Express & Logistics owns the express and logistics service brand "EMS", which was founded in 2015 by combining assets of the parent's provincial units.
Various Chinese media reports noted that China Post has lost part of its market share to rapidly growing private equivalents, such as SF Holding and Alibaba's courier arm Cainiao. Shanghai-based ZTO Express went public in New York in 2016 while other delivery firms such as SF Express, STO Express, YTO Express, and Yunda Express have landed IPO deals via backdoor listings.
The IPO move follows an earlier attempt by China Postal Express & Logistics in August 2011, when it submitted the listing application to the China Securities Regulatory Commission (CSRC). Due to intense market competition, however, it withdrew the IPO filings later.
Wanted: private investments
This time, the IPO is again on the agenda and, according to a Xinhua report, the biggest question is whether China Post will be listed as a whole, or it will spin the China Postal Express & Logistics off to list the EMS service provider. At present, Postal Savings Bank of China under China Post has been listed on the Hong Kong stock exchange.
According to Zhao Xiaomin, an express industry analyst, China Post may go public on the whole, or via the back-door listing method. However, irrespective of how the listing takes place, any China Post listing is likely to face strong competition from a growing number of air freight logistics companies in China seeking new investments.
The Civil Aviation Administration of China (CAAC) last month published a list of twenty-eight aviation/logistics projects seeking private investment, among them Air China Cargo and Ezhou Civil Airport who are seeking billions of dollars in new investments. Ezhou Airport is scheduled to become the future central hub of Shenzhen-based SF Express.
Nol van Fenema