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Sequoia, Warburg-Backed ZTO Express Files For US$1.5Billion IPO

China-based logistics company ZTO Express, backed by Sequoia Capital and Warburg Pincus, has filed for a U.S. initial public offering on the New York Stock Exchange, seeking to raise between US$1.5 billion. ZTO Express would be the first Chinese courier service provider to list in the U.S.

Founded in 2002, ZTO Express handled 2.95 billion parcels in 2015 which translates to 14.3% of market share in China by parcel volume. Handling has grown by 80.3% in compound annual growth rate between 2011 and 2015. Its operating margin was 25.1% last year.

It currently employs 250,000 people with 40,000 vehicles and operates over 10,000 service centers in China, covering 97% of China’s city districts, as well as over 50% of rural counties and villages.

The company recorded US$915 million in revenues and gross profit of US$314 million in 2015, up from US$580 million in revenues and gross profit of US$165 million in 2014.

China is the largest express delivery market in the world, with US$609 billion in online gross merchandise volume in 2015, almost double to US$342 billion recorded in the U.S.

China also moved 20.7 billion express delivery parcels last year, compared to 13.4 billion in the U.S. But on a per capita basis, China still lags behind, with 15 express parcel per person compared to 42 in the U.S.

Around 70% of express delivery parcels in China were generated from e-commerce, compared to 50% in the U.S. by ChinaMoneyNetwork

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