Yu Weijiao, founder and chairman of Shanghai Yuantong Express Logistics Co Ltd, delivers packages for customers in Hangzhou, Zhejiang province. (Photo/China Daily)
Logistics companies are seeking funding to improve their technology and move overseas
The listing of Shanghai Yuantong Express Logistics Co Ltd (YTO) on Thursday has made Yu Weijiao, founder of the company, and his wife, the wealthiest couple in China's express delivery business.
YTO won the race to the capital market by merging with listed company Dayang Trands. The company's market value has now reached 97.5 billion yuan (.4 billion). The couple's wholly-owned company took a 51 percent share of the listed company. Analysts estimate that their fortune is 62 billion yuan.
"With access to the capital markets, we will launch the new platform and step into the age of cloud computing and big data," said Yu. "We aim to become a top-five comprehensive logistics supplier and supply-chain integrator around the world."
The Shanghai-based company was founded in 2000 by Yu Weijiao with registered capital of one million yuan. But its revenue shot up to 12.1 billion yuan in 2015 after setting up in cooperation with e-commerce giant, Alibaba, almost 10 years ago.
Public information shows that YTO has set up 82 management divisions, 64 trans-shipment centers and more than 65,000 dispatching stations.
Currently, the company has more than 260,000 employees and its network covers 1,600-plus cities across the nation.
Analysts say YTO benefitted from China's booming online-shopping industry in the past decade, as did other logistics companies. China had 9 billion of online retail sales last year, almost double the 2 billion in the US, according to a report of The Wall Street Journal.
Besides YTO, the other four leading delivery companies - Shunfeng Express, Shentong Express (STO), Huitong and Yunda - are all seeking to go public via merging with listed companies. Zhongtong Express uploaded a prospectus on the website of the US Securities and Exchange Commission at the end of last month.
"The rush to the capital market reflects the worries and misgivings of the delivery industry, which is under pressure both from key shippers and intensified competition," said Shao Jianbing, professor of Business School at Liaoning University.
Public information shows that YTO's delivery business gross profit margin went down from 21.49 percent to 13.42 percent in the past year, even though it had a 14.7 percent share of nation's express-delivery market by parcel volume.