顺丰快递启动IPO

China's leading courier-- Shunfeng Express, has always shied away from the capital markets, but two weeks ago finally announced plans to go public. Why this decision now, and will it actually involve an IPO, or perhaps something more private? Our reporter Xu Xinchen speaks to an expert in the industry.

Shunfeng Express has over 12,000 branches across China and overseas, with a total of over 16,000 freight vehicles and 27 courier planes of its own. The company's yearly income is estimated in the tens of billions of yuan. While it's a major company that's been in business for over 20 years, however, it's only been involved in the capital markets on a single occasion. Why talk about going public now? Zhao Xiaomin has been in the logistics business for nearly two decades, and says the government's really behind it -- that China wants to use Shunfeng as an international showcase for the country's courier capabilities.

"The most important point is that this is a plan designed by the country. There is a growing demand for courier services, and the central government is encouraging companies to expand their businesses in lower-tier cities and the countryside. Cross-border trade is still growing in China, and that needs transportation support. Shunfeng is the logical choice for a China company to enter the world competition for courier services," Zhao said.

In 2013, Shunfeng did sell a 25% of its stake to four state-owned companies, including China China Merchants Group and CITIC Capital. While the company thus has substantial government backing, Zhao believes Shunfeng will not look for an IPO but rather go for a back door listing of some kind. Why not? Zhao says it's really a timing issue and the company is eager to be listed as soon as possible. A source inside Shunfeng confirms this, saying the company is confident it will be listed within one year.

"I think Shunfeng will unify its businesses and go public as a group. The company will eventually evolve into a giant in trade logistics. Its core business will stay with offering express delivery services but the company can build an industrial chain around this core, including IT and transportation. That will then help with its human resources and money issues. I believe it will then become more involved with capital markets," Zhao said.

Zhao notes that China Post's EMS service has been improving over the past few years and says the government hopes to use Shunfeng and EMS to create healthy competition in the market. There are estimates that China's courier market could eventually develop to more than 200 million deliveries a day, more than four times today's volume.