Chinese logistics company Best is hoping to raise $930 million through a U.S. initial public offering (IPO), according to reports released Thursday (Sept. 7).
The company is backed by Alibaba Group and led by Johnny Chou, former Greater China president for Google. Best had previously expected to raise $750 million but increased its offering size last month, according to Reuters. The IPO could see the company valued at up to $5.7 billion.
Best highlights the strength of China’s logistics market, which saw $1.6 trillion in revenue last year. The company secured 8.6 percent of the nation’s express delivery market in the first six months of 2017, reports said.
S.F. Holding, YTO Express and STO Express, all Chinese logistics companies, have also recently filed IPOs. Alibaba backed YTO Express. Best said it hopes to use $300 million of the funding raised through the IPO to expand its storefronts, logistics and supply chain services. Another $100 million will be used to invest in technology, with the rest funneled to “general corporate purposes” and mergers and acquisitions (M&A), according to reports.
Chinese companies, especially FinTechs, are beginning to turn to overseas public offerings to raise new capital, according to reports earlier this week. Analysts say the trend is the result of tightened regulations at home, especially those impacting alternative lending startups.
“An increasing number of FinTech IPOs in Hong Kong and the United States are expected to take place,” said Jianbin Gao, a Shanghai-based PricewaterhouseCoopers assurance partner, told the South China Morning Post, according to Finextra. “They mainly aim to list in the U.S., though Hong Kong is also an option.”
China isn’t only instituting tougher rules when it comes to FinTechs. It’s also eyeing the ICO market with concern, banning them altogether earlier this week. TechCrunch reported the Chinese Central Bank said ICOs have “disrupted the economic and financial order.”
The order, as noted by Chinese financial news site Caixin, was handed down by a committee studying internet-based financial risk, which offered up a list of 60 exchanges that will be inspected. The freeze ICO remains in place until then.