SF Express Mulls Hong Kong Share Sale

The express delivery giant could raise roughly $5 billion through a secondary listing in Hong Kong, or an IPO of its “main courier business."
Anthony RussoNov 17,2020,15:44

Chinese express delivery giant SF Holding Co. (SHE: 002352) is weighing several different ways to raise money through a share sale in Hong Kong.

Also knowns as SF Express, the company could raise roughly $5 billion through a secondary listing in Hong Kong, or an IPO of its “main courier business,” as reported by Bloomberg today, citing people familiar with the situation. Also, it has had preliminary talks with possible advisors on the proposed offering, according to the news outlet. SF, which was established in 1993, became publicly traded in Shenzhen via a so-called backdoor listing in 2017.

At the time, the deal helped its founder Wang Wei emerge as China’s third wealthiest person, but has now fallen to fifth, according to Forbes’ annual list of China’s 400 Richest individuals. His wealth in 2020 has surged nearly 113% year-over-year.

Despite ending lower in Shenzhen today, SF has performed relatively well in the city this year thanks to the demand its parcel delivery services are seeing this year from the coronavirus pandemic. Shares of SF have surged nearly 110% year-to-date, while its market capitalization currently sits at 357.45 billion yuan ($54.51 billion).

Late last month, a fellow Chinese express delivery firm ZTO Express (HKEX: 02057; NYSE: ZTO), completed its secondary Hong Kong listing by raising HK$9.81 billion ($1.27 billion). Since making its trading debut, ZTO has watched its Hong Kong stock rise 19% to date from its offering price of HK$218 per share.

In the first nine months of the year, SF generated 109.6 billion yuan in revenues, up 39% year-over-year. Its net income in the period hit around 5.6 billion yuan, representing roughly a 30% jump from the same in the preceding year. In September, for its express logistics service, SF handled 728 million shipments, representing a 60% year-over-year surge.

According to Bloomberg, the discussions of the potential share sale in Hong Kong are still at a preliminary stage.

Topics:SF Express, ZTO Expres.