One of the Wealthiest Men in China: A Delivery Man!

Local Editor

Imagine your net worth increasing by $2 billion a day. That's what happened when China's largest parcel delivery company, S.F. Express, made its stock exchange debut and turned founder Wang Wei into the country's third-richest man.

It's a stark reversal for a company that got its start in what Wang has called the sneaky business of "black delivery," back in the '90s when only China's post office was allowed to handle packages. The courier company he created navigated the shadows of the border between China and Hong Kong for 16 years until the government gave its sanction.

Last week's official launch of S.F. Express's so-called backdoor listing on the Shenzhen Stock Exchange, approved in December and pushed through rapidly with government support, helped produce a 59 percent surge in shares of parent S.F. Holding Co., giving Wang a net worth $26.5 billion on the Bloomberg Billionaires Index.

The Friday launch coincided with a bonus awarded to S.F. employees by Wang himself the same day, which many used to buy company shares. These purchases contributed to the dramatic rise in the share price, in part due to the relatively small amount of outstanding shares being traded.

Wang and five other package delivery billionaires, including the founder of ZTO Express Inc. which debuted on the New York Stock Exchange in October, had seen their fortunes swell based on listings in the past five months alone, amassing a combined wealth of about $47 billion, the Index shows.

They're all part of the online shopping boom led by Alibaba Group Holding Ltd., with Wang's S.F. Express the leader by revenue ahead of hundreds of competitors.

"There's a history of rough competition in this industry in particular."

That they all sought money in capital markets in such a short period, most using the quicker route of so-called backdoor listings instead of initial public offerings, points to an underlying tension: With business surging, competitors are piling in, driving down profit margins and setting up the industry for consolidation to just two or three key players-like FedEx, UPS and DHL elsewhere. The race to raise money and expand into China's smaller cities will determine which companies survive the eventual shakeout.

"The industry has passed the first phase of vigorous growth," said Su Baoliang, a Beijing-based analyst at Sinolink Securities Co., who estimates revenue growth will slow to 15 percent in the next two to three years from its current rate of 40 percent. "Companies have to enhance operational efficiency. Otherwise they will be either marginalized or acquired by competitors."

Yet Chinese companies are also counting on opportunity-on Jack Ma of Alibaba and his promise to US President Donald Trump to create US jobs by linking 1 million American small businesses with Chinese buyers. That's a lot of potential deliveries.

"Not only the past decade, but the next few years will also be a golden age for Chinese couriers' development," said John Song, a Shanghai-based director of the logistics and transportation practice in China at consultancy Deloitte. "There is huge potential in the development of these Chinese couriers."

Source: News Agencies, Edited by website team