HONG KONG • Best, a Chinese logistics company backed by Alibaba Group, is launching a United States initial public offering (IPO) that is seeking as much as US$932 million (S$1.3 billion) to fund an expansion of its logistics and supply chain network, develop new technology and open more convenience stores.
The Hangzhou-based company, led by Mr Johnny Chou, a former Greater China president for Alphabet's Google, plans to list on the New York Stock Exchange. The IPO will be equivalent to 16.4 per cent of the firm's enlarged share capital.
China is the world's biggest logistics market, notching up US$1.6 trillion in annual revenue last year, with demand for express delivery services expected to jump 17.9 per cent annually in the six years to 2021, Best said, citing forecasts from consulting firm iResearch.
The offering will include an issue of 53.56 million new American Depositary Shares, each representing one class A ordinary share, in an indicative range of US$13 to US$15 each, according to a filing with the US Securities and Exchange Commission on Wednesday.
Existing shareholders - including private equity firms CDH Investments, China Renaissance Capital, state-owned Everbright Financial Holding Investment Holding and a unit of Goldman Sachs Group - are selling another 8.54 million American Depositary Shares.
Mr Chou, the CEO, is offering one million shares. His brother, chief strategy and investment officer George Chow, is selling 250,000. Best is offering shares at a 2019 forecast price-to-earnings (P/E) ratio of 17.7-20.4 times, according to a term sheet seen by Reuters, compared with 13.7 times for ZTO.
China is the world's biggest logistics market, notching up US$1.6 trillion (S$2.2 trillion) in annual revenue last year, with demand for express delivery services expected to jump 17.9 per cent annually in the six years to 2021, Best said, citing forecasts from consulting firm iResearch.
P/E ratios tend to be higher in China. SF Holding trades at 35.3 times and YTO, at 21.7 times. The IPO will be priced on Sept 19. Its market debut is set for the day after.
The company plans to use US$300 million to expand its convenience stores and its logistics and supply chain services, with another US$100 million set aside for technology investments. The remainder will be used for general corporate purposes and potential acquisitions.