A group of Chinese investors has acquired a large minority holding of up to 25% in S.F. Express,the country’s leading private express delivery company, to help finance its rapid growth.
S.F. Express, with reported annual revenues of some RMB 20 billion (€2.4bn) is the largestprivately-run express delivery services company in China and has expanded its air and road servicesrapidly in recent years to profit from the country’s booming express market growth.
The Shenzhen-based company is also one of the express industry partners in the ambitious RMB100bn (€12.6bn) nationwide package delivery network being set up by Alibaba Group founder Jack Maand designed to deliver e-commerce purchases to Chinese consumers within 24 hours.
Citic Capital, a partly state-owned private equity fund based in Hong Kong, Oriza Holdings, aSuzhou-based investment company, and China Merchants Group, a Hong Kong-based state-ownedcorporation with extensive holdings, including in the logistics and shipping sector, have acquireda stake of “no more than 25%” in Shunfeng Express, which is generally known as S.F. Express.
Citic Capital said yesterday that the transaction, for an undisclosed sum, was by far one oflargest renminbi-denominated transactions of the year. The investment was made through its firstrenminbi-denominated fund which has so far raised RMB 3 billion (€365m) for M&A deals, growthcapital and other investments.
The investment was “a recognition of the attractive macroeconomic factors that supported thegrowing express delivery industry” and “demonstrated S.F. Express’ industry leading position,strong business model, as well as a mutual affirmation of the vision and development strategies ofthe company”, the investment company stated.
Citic Capital’s chairman and CEO Yichen Zhang said: “We are excited about this superbtransaction which allows us to work closely with S.F. Express and share the promising growthopportunity it offers as it expands on its existing successful franchise, and diversifies into newbusiness areas that are in line with the growth of the Chinese economy. We look forward to furtherenhancing its long-term values and taking it to new heights.”
S.F. Express vice president Wang Lishun was cited by the People’s Daily newspaper as saying thatthe investment would strengthen the company’s IT systems and aviation hubs.
The express company was established in 1993 and has created a nationwide delivery networkthrough a mix of branch offices and franchise partners. It now has more than 6,000 service centrescovering 31 provinces and regions of China, including over 300 large and medium-sized cities,according to information on its website. The company currently operates a fleet of more than 10,000vehicles, according to the People’s Daily.
Its airline subsidiary, SF Airlines, set up in 2010, has expanded its fleet rapidly in the lasttwo years and now operates 12 B737 and B757 freighters out of its main base at Shenzheninternational airport.
After opening branches covering Hong Kong, Taiwan and Macau, S.F. Express has expandedinternationally over the last few years with offices in Singapore, South Korea, Malaysia, Japan,and the United States, and offers air express deliveries to those countries.
