China Postal Express and Logistics cancels IPO
January 30, 2014 Category Express delivery, Logistics
China Postal Express and Logistics Co (EMS), a Chinese state-owned express courier company, has withdrawn its application to go public amid strong competition from domestic rivals in the CNY198 billion express delivery market. EMS, cited “strategic adjustment” issues as the major reason behind the IPO pullout. The firm has decided to fine-tune its original parent-subsidiary structure to a more effective headquarters-branch management model to boost its competitiveness. Founded in 2010, EMS was the result of a merger by the China Post Group and provincial postal companies to tap into the country’s fast-growing express delivery market. The company said on its website that it has the widest coverage nationwide and the richest product portfolio. In August 2011, the company filed an application to be listed on the A-share market and won regulatory approval in May 2012, but its efforts to float shares were stopped by an IPO suspension that started at the end of 2012. The withdrawal of the IPO plans is an unwelcome hit to the courier, which has slipped behind rivals including SF Express (Group) Co and YTO Express (Logistics) Co, said Xu Yong, Analyst with China Express and Logistics Consulting, a logistics consultancy. EMS’ market share is being increasingly squeezed by private courier companies, which together account for about two-thirds of China’s express delivery market in terms of revenue, and more than three-fourths by number of parcels, according to data from the State Post Bureau released in June. The market value of China’s express delivery market is expected to reach CNY400 billion by 2020, Ma Junsheng, Director of the State Post Bureau, said in October.
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