财新传媒
位置:博客 > 阳歌 > IPOs: Alibaba-Backed Logistics Firm Stumbles Towards IPO Gate

IPOs: Alibaba-Backed Logistics Firm Stumbles Towards IPO Gate

Bottom line: Best Inc is likely to make its New York IPO in the next two weeks, but its shares will price in the middle of their range and debut weakly due to stiff competition in the logistics sector.

Best Inc. raises IPO target

It's been a quiet year so far for major Chinese IPOs in New York, but all that looks set to change soon with several major offerings coming down the pipeline. One of those is in the headlines as we head into the end of August, with word that Best Inc, also known as Best Logistics, is driving towards a New York offering that will raise up to $1 billion. That deal was first announced in June, so it's a bit unclear why it has taken so long to jump back into the headlines with this boosted fund-raising target.

Based on what I'm hearing from one of my sources, the US securities regulator is giving extra scrutiny to a group of fintech companies that are all lining up to list in New York before the end of the year, due to the newness of the business type. Best Inc doesn't really fall into that group, as it's in a traditional business that's thriving due to China's e-commerce boom. What's more, this company is also backed by e-commerce giant Alibaba (NYSE: BABA), and counts the former head of Google (Nasdaq: GOOG) China as its chief.

Perhaps one of the reasons for the delays is the lackluster performance for ZTO Express (NYSE: ZTO), another Chinese logistics company that made an IPO in New York last October. Since raising the $1.4 billion in that offering, ZTO's shares have been on an express trip downwards, and now trade about 30 percent below their IPO price. That certainly doesn't seem to reflect very strong investor appetite for this kind of company, probably in part due to the intense competition in the sector.

All that said, let's look quickly at the latest headlines that say Best Inc has made a new filing saying it is planning to raise up to $1 billion through its offering. (Chinese article) The filing appears to just be an update of the initial filing in June, where no specific target was given. But at least one report from an authoritative financial media says the earlier filing indicated the company was planning to raise around $750 million at that time.

Big Book-Runners

There are five major book-runners on this deal, namely Citigroup, Goldman Sachs, Credit Suisse, JPMorgan and Deutsche Bank. With a pedigree like that, the company should be able to attract plenty of investors. So the fact that it's taking them this long to sell the deal probably means they were coming up against some skepticism in the investment community.

The fact of the matter is that logistics is incredibly competitive in China right now, and is in all likelihood due for some consolidation. Whereas a major market like the US has just two or three national delivery companies, China has at least half a dozen, and many smaller firms like Best Inc that provide related services like warehousing. But like everything else in China, consolidation seems to take a long time to come because everyone wants to be the last one standing and has lots of financial backing.

There's not much more to say about this IPO, though the fact that they're finally giving a fund-raising target probably indicates it's back on track and will happen in the next couple of weeks. I would expect it probably won't meet the $1 billion target and will price in the middle of its range, and will probably debut flatly and come under immediate downward pressure.

Meantime, I'll close by noting briefly that one of my sources tells me that online consumer lender Qudian is likely to make its first public IPO filings in September, for another deal that could raise $1 billion or more. This one will be more interesting, as it will be the largest fintech deal from China to date, and could set the tone for a larger group of similar companies hoping to make New York listings by the end of the year. We'll have to wait and see some financials, but I do expect this listing should do a bit better than Best Inc's due to the size of the offering and newness of the group.

 
推荐 0