PE interest in Quanfeng could lead to IPO
February 28, 2013 Category Express delivery, Logistics
Quanfeng Express, a Chinese courier that started operations in July 2011, has attracted investment interest from private equity companies. The funding is likely to pave the way for the first initial public offering (IPO) in the industry, analysts say. Leading Capital Fortune, Beijing Pengkang Investment Co and Phoenix Capital Asset Management have announced they will inject CNY200 million into the courier to bolster its nationwide expansion, said the company’s President Chen Jiahai. Quanfeng’s existing shareholders maintain the controlling right in the company, and investors will only intervene in financial issues, not in daily operations, company Spokesman Dai Changzheng said. The company aims to turn itself into a mid-to-high-end express delivery firm, following in the footsteps of SF Express (Group) Co, which charges double for same-city deliveries compared with local rivals, Dai said. Aided by the funding, the company also plans to seek a listing in three to five years, according to Dai. He added that Quanfeng targets small parcels weighing less than 5 kg, and focuses on cross-town businesses in first-tier cities such as Beijing, Shanghai and Guangzhou. Greater supervision of the industry has been called for after postal authorities canceled the licenses of 116 couriers in the past year for allegedly losing mail and poor sorting. “We want to guarantee customers speed, safety and quality of services, so that they are willing to pay more for our services,” Dai said. China’s express delivery sector was worth CNY48.9 billion in the first half of 2012, according to China Express and Logistics Consulting. Compared with interregional and international businesses, cross-town delivery enjoyed the fastest year-on-year growth of 54.5% in the first quarter of 2012, with revenue reaching CNY2.02 billion, according to China Venture Group, as reported by the China Daily.
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