SF Express Delivers Turbocharged IPO

(Beijing) — China’s most valuable private courier, SF Express Co. Ltd., completed a backdoor listing on Friday, feeding on explosive demand from a nation whose fondness for e-commerce has given birth to the world’s biggest express-delivery sector.

Publicly traded cable manufacturer Maanshan Dingtai Rare Earth and Materials was officially renamed SF Holding after being fully acquired by the Shenzhen-based courier, which has becomes the last of China’s five largest players to list.

The stock code will remain unchanged, according to a company announcement on the Shenzhen bourse Thursday evening.

On Friday, the newly named SF Holding finished at an all-time high since Dingtai’s own IPO in 2010. The company’s stock rose steadily throughout the week as rumors spread that the reverse takeover would soon become official, and jumped by the daily 10% trading limit on Thursday and Friday.

With market capitalization of 231 billion yuan ($33.6 billion), SF Express is worth more than the combined value of YTO Express, STO Express and Yunda Express — three other private couriers that went public through respective backdoor listings in 2016.

SF Express was established in 2010 by entrepreneur Dick Wong, who was born in Shanghai, grew up in Hong Kong and is now the country’s fourth-richest man, according to the latest Forbes China Rich list. He began his business in the early 1990s, toting parcels between different parts of Hong Kong and the Shenzhen border.

His one-man courier operation has grown to become a transport chain with 37 cargo airliners and presences in the U.S., Australia and Japan.

The company more than doubled its profits to 4.1 billion yuan in 2016, as SF’s business, known for slightly higher-end and speedier services than its rivals, expanded in recent years.

China’s express-courier industry has undergone widespread consolidation in the past year as smaller players bowed out of the crowded market. The remaining top five players — SF Express, YTO Express, Yunda Express, STO Express and ZTO Express — have all gone public, with ZTO staging the second-largest U.S. IPO by a Chinese company in November.

However, share prices of all the private couriers, which have thrived on the nation’s booming e-commerce sector, have dropped 15% to 30% since late last year. One out of every 10 yuan in retail last year was spent by consumers online, requiring processing over 30 billion parcels.

Contact reporter April Ma (fangjingma@caixin.com)