Chinese Container Shipping Giant Eyes $218 Million Shanghai IPO

(Deal Street Asia) — Shanghai Zhonggu Logistics Co. Ltd., a container logistics solution provider, is planning to raise 1.48 billion yuan ($218 million) in an IPO on the main board of the Shanghai Stock Exchange. 

The company, which kicked off its subscription exercise on Sept. 16, has offered up to 66.67 million common shares at 22.19 yuan apiece. Its shares have been oversubscribed 7,496 times, according to a company filing on Sept. 18. 

Zhonggu plans to use the IPO proceeds to purchase containers and container ships. 

Beijing-based investment bank China International Capital Corp. Ltd. is the lead underwriter for the deal. Zhonggu will float the shares under the symbol “603565.”

With 120 container ships and tens of freight routes across the country, it offers door-to-door logistics solutions for enterprises. 

Global leading data intelligence institute for line operators Alphaliner ranked Zhonggu No. 13 on the list of Top 100 Carriers 2019, it said. 

Its annual revenues over the past three years stood at 9.9 billion yuan in 2019, 8.08 billion yuan in 2018 and 5.6 billion yuan in 2017. As of December 2019, it booked a net profit of 86 million yuan, up 309 million yuan from the previous year, according to its prospectus.

Following the IPO, Zhonggu Shipping will remain the largest shareholder in Zhonggu Logistics with 63.13%. Its other shareholders include SoftBank’s SBCVC, with 2.23%, and supply chain focused Eastern Bell Capital, with 1.18%.

SBCVC had made an undisclosed amount of strategic investment in Zhonggu Logistics in 2017. Since then, Zhonggu Logistics has closed two rounds of funding from the state-backed Shanghai Free Trade Zone Equity Fund in 2017 and Eastern Bell Capital in 2019. 

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