China’s Zhaijisong courier service plans Hong Kong listing next year

Beijing-based courier service Zhaijisong plans to list on the Hong Kong stock exchange early next year, company president Chen Ping said.

Chen said the privately owned firm was the fourth largest domestic courier firm in China, holding five pct of a courier market dominated by China Post’s EMS.

He would not disclose Zhaijisong’s fund-raising target but he told a business gathering that the money would be used to mechanize more of the company’s operations and add to its current fleet of 1,400 trucks.

London-based Investment bank Cazenove would manage the listing, Chen said.

Zhaijisong was founded in 1994 with capital of 500,000 yuan. After running short of cash after its first year of operation, Chen borrowed 160,000 usd from a friend and built the company’s turnover up from 700,000 yuan in its first year to 550 mln yuan.

Zhaijisong now has assets of over 200 mln yuan and 8,000 staff, the company president said. It made 21 mln yuan in after-tax profits last year, and that figure is expected to grow to 40 mln yuan this year, Chen added.

Chen said he expected local private and multinational courier services in China, including DHL, FedEx and UPS, to benefit from the slow pace of reform within the state sector.

Last July, industry sources were reported as saying China’s State Postal Bureau (China Post) planned to restructure EMS as a joint-stock national chain to protect its declining market share.

But Chen said he did not think EMS would be split off soon.

‘That will allow private firms to grow and eat up its market share. When China Post finally decides to privatise, it will be too late,’ he said.