Express delivery giantZTO Express Cayman Inc. is looking to raise as much as HK$12 billion ($1.56 billion) in its Hong Kong second listing, joining a growing cohort of U.S.-traded Chinese firms selling shares in the Asian financial hub.
ZTO Express is selling 45 million shares in the offering, it said in a U.S.filing on Tuesday. It has set a maximum price of HK$268 apiece for the portion of the deal being marketed to retail investors, which represents a 10% premium to Tuesday’s closing price of $31.37. Its New York-traded American Depositary Shares have gained 34% this year.
The share sale comes hot on the heels ofYum China Holdings Inc., China’s largest restaurant company,raising $2.2 billion in a Hong Kong second listing. Chinese firms listed in the U.S. are increasingly looking to establish a trading foothold in Hong Kong as relations between the two countries come under significant strain. U.S. regulators arethreatening to restrict Chinese firms’ access to American capital markets if they do not allow authorities to review their audits, escalating an issue that has vexed them for over a decade.
The trend is a boon to Hong Kong, which is riding a wave of investor enthusiasm for first-time share sales despite uncertainty due to a broad national security law imposed by China at the start of the summer.
Almost $10 billion has been raised from the second listings of Yum China, JD.com Inc. and NetEase Inc. this year, bringing the total haul from initial share sales to $22.7 billion, according to data compiled by Bloomberg. The city is set to get a further boost from the mega IPO of Jack Ma’s Ant Group, which couldraise about $30 billion through a dual listing in Hong Kong and Shanghai, Bloomberg News has reported.
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ZTO Express is one of China’s leading express delivery companies, with a 21.5% market share, according to its website. Its net income grew 6.5% in the second quarter from a year earlier to 1.45 billion yuan ($214 million) as parcel volume grew thanks to people buying more goods online.
The company plans to price the Hong Kong offering on Sept. 22 and start trading on the city’s stock exchange on Sept. 29.
Goldman Sachs Group Inc. is the sole sponsor for the ZTO Express listing, while UBS Group AG, China International Capital Corp. and Citigroup Inc. are joint bookrunners.
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