Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Bottom-Up

Several weeks after its October IPO (and a fortnight after its maiden set of results) shares of Chinese express parcel carrier <a href="https://www.smartkarma.com/entities/23628" target="_blank" data-smartkarma-citation="entities:23628:1">ZTO Express (ZTO US)</a> continue to languish, trading almost 28% below the IPO price of US$19.50. Elsewhere, China's largest express parcel carrier byvolume, <a href="https://www.smartkarma.com/entities/20319" target="_blank" data-smartkarma-citation="entities:20319:1">YTO Express (600233 CH)</a>, recently completed a reverse takeover; shares in the newly-formed company began trading in Shanghai on December 6th, and promptly fell by -9% that day.Meanwhile, China's largest private express parcel carrier byrevenue, SF Express, is in the final stages of its own reverse takeover, via Shenzhen-listed <a href="https://www.smartkarma.com/entities/4128" target="_blank" data-smartkarma-citation="entities:4128:1">Maanshan Dingtai Rare A (002352 CH)</a>. The new availability of pro-forma financial statements for both YTO and SF Express gives us an opportunity to compare these two companies to ZTO, which has been a focus of our recent coverage here on Smartkarma. In this note we will compare and evaluate the finances and operations of the three subject Chinese express parcel carriers (ZTO, YTO, SF Express) plus the two dominant US express parcel companies, <a href="https://www.smartkarma.com/entities/19984" target="_blank" data-smartkarma-citation="entities:19984:1">United Parcel Service Cl B (UPS US)</a> and <a href="https://www.smartkarma.com/entities/14577" target="_blank" data-smartkarma-citation="entities:14577:1">Fedex Corp (FDX US)</a>. Our main objectives in writing this note are:<ol><li>To give a better understanding of the different ways the three Chinese companies are approaching China's fast-growing express parcel market</li><li>To identify the advantages and risks associated with each company's specific approach to the market</li><li>To provide an initial look at Best Logistics Technologies (private), another leading Chinese express company that enjoys backing from <a href="https://www.smartkarma.com/entities/787" target="_blank" data-smartkarma-citation="entities:787:1">Alibaba Group Holding Ltd (BABA US)</a> and <a href="https://www.smartkarma.com/entities/745" target="_blank" data-smartkarma-citation="entities:745:1">Hon Hai Precision Industry (2317 TT)</a> and which may pursue an IPO as early as Q1 2017, according to recent media reports</li></ol>

Several weeks after its October IPO (and a fortnight after its maiden set of results) shares of Chinese express parcel carrier ZTO Express (ZTO US) continue to languish, trading almost 28% below the IPO price of US$19.50. Elsewhere, China's largest express parcel carrier byvolume, YTO Express (600233 CH), recently completed a reverse takeover; shares in the newly-formed company began trading in Shanghai on December 6th, and promptly fell by -9% that day.Meanwhile, China's largest private express parcel carrier byrevenue, SF Express, is in the final stages of its own reverse takeover, via Shenzhen-listed Maanshan Dingtai Rare A (002352 CH). The new availability of pro-forma financial statements for both YTO and SF Express gives us an opportunity to compare these two companies to ZTO, which has been a focus of our recent coverage here on Smartkarma. In this note we will compare and evaluate the finances and operations of the three subject Chinese express parcel carriers (ZTO, YTO, SF Express) plus the two dominant US express parcel companies, United Parcel Service Cl B (UPS US) and Fedex Corp (FDX US). Our main objectives in writing this note are:To give a better understanding of the different ways the three Chinese companies are approaching China's fast-growing express parcel marketTo identify the advantages and risks associated with each company's specific approach to the marketTo provide an initial look at Best Logistics Technologies (private), another leading Chinese express company that enjoys backing from Alibaba Group Holding Ltd (BABA US) and Hon Hai Precision Industry (2317 TT) and which may pursue an IPO as early as Q1 2017, according to recent media reports

Where Is The Value in Chinese Express? We Compare ZTO, YTO, SF Express, & Preview Best Logistics IPO

Hong Kong

S.F. Holding Co., Ltd operates as a holding company. The Company, through its subsidiaries, provides logistics, order tracking, supply chain management, and warehousing services. S.F. Holding operates worldwide.

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S.F. Holding (6936 HK)

Where Is The Value in Chinese Express? We Compare ZTO, YTO, SF Express, & Preview Best Logistics IPO

Several weeks after its October IPO (and a fortnight after its maiden set of results) shares of Chinese express parcel carrier ZTO Express (ZTO US)...

Daniel Hellberg

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