Beijing, Oct 24 (IANS) China will soon get its first listed express delivery company in STO Express Co. Ltd, the media reported on Saturday.
Shanghai-based STO Express aims to list on the Shenzhen stock exchange through a reverse merger with a shell entity, Xinhua reported.
Reverse merger, also called back-door listing, helps a private company float shares by injecting its assets into a publicly traded firm.
After nearly two months of trading suspension, Shenzhen-listed IDC Fluid Control Co. Ltd. said it had reached agreement with STO Express on restructuring.
For IDC Fluid Control, a manufacturer of faucets, taps and bathroom accessories based in Zhejiang province, the deal is both timely and urgent.
It has received two warnings pertaining to insufficient assets from a lender it was pledged to by its actual owner Zheng Yonggang 10 months ago.
For STO Express, the listing is of vital importance in its competition with YTO Express (Logistics) Co. Ltd, as both seek to be the first listed company in the sector.
The relationship between Zheng Yonggang and Chen Dejun, STO Express chairman who was Zheng’s classmate in a CEO training programme in 2012, might have helped secured the deal.
China’s express delivery market has about 14,000 companies, employing nearly six million workers.
None of the top five players — STO Express, YTO Express, ZTO Express Co Ltd, Shanghai Yunda Express Co Ltd, and SF Express (Group) Co. — is listed.
Despite a slowing economy, express delivery services have grown steadily. The total amount of express delivery packages has increased 8.2 times over the past six years, and about 14 billion packages were delivered across China in 2014, a year-on-year growth of 52 percent.
On average, every Chinese person received more than 10 parcels last year, and that is when only half of the country is covered by the delivery network. The rest are still relying on snail mail.
In the first half of 2015, express deliveries jumped by more than 43 percent year on year.