- CNTV English - CCTV News

Homepage > News > Biz >

China Post to list unit in Shanghai

07-09-2010 15:24 BJT

Newly formed express and logistics arm planning public float next year

BEIJING - China Post, the official postal service of China, is planning to list the shares of China Postal Express & Logistics Corporation, its express and logistics unit, in Shanghai or Shenzhen next year, a source familiar with the matter said on Thursday.

The float will make China Postal Express & Logistics Corporation the first listed express company in China, said Shao Zhonglin, deputy secretary-general of the China Express Association.

The integrated unit was set up with a registered capital of 200 million yuan ($29.51 million) on June 29 and combines the express and logistics operations of the group.

Liu Andong, general manager of China Post, said the integration of the express unit EMS Corporation and the logistics arm China Post Logistics Co Ltd was part of the plans to transform itself into a modernized post group.

EMS was established in 1985 to operate the country's postal express mail service, while China Post Logistics was founded in 2003 to manage comprehensive businesses such as warehousing, distribution, and transportation.

In 2009, EMS earned revenue of around 15 billion yuan, and was the market leader in China, said a July 5 report in the 21st Century Business Herald.

The new entity will own the "all night" cargo aviation network and also have the largest domestic express service network. It will also promote resource sharing between the two sectors and help reduce costs, said the group.

Zhang Hui, an analyst tracking the logistics sector at Donghai Securities, said China Post is likely to use the high quality assets of the express sector to guarantee profits and attract investors. The company may, however, use the float proceeds for the less developed logistics business.

Zhang expects the company to raise no more than 1 billion yuan from the IPO, aided by strategic investors from the airlines sector.

Analysts said the thorniest issue for the new company will be on how to divide the business between Express & Logistics Corporation and the parent group.

"That means there will be a lot of overlapping transactions between the two companies. Both companies will have problems on how to factor the relevant costs," said Xu Yong, chief advisor of China Express Consulting Website.

There are problems also, if the company opts for a clear division of its businesses and finances as it may end up facing internal competition, said Zhang.

"The float will not only benefit China Post, but also the private sector," said Wei Dengming, deputy director of the Enterprise Development Department at ZJS Express, a private express delivery company in China.

China Post owned 1.802 million shares of Hunan Copote Science & Technology Co Ltd and was planning a back-door listing. However, the plan was abandoned and the shares were transferred to another postal institute in May.

Postal services are generally government-controlled and very few have actually tested the market waters.

German postal operator Deutsche Post was one of the early birds in the market and listed shares of its subsidiary on the Frankfurt bourse in 2000. The subsidiary is the biggest listed logistics company in the world and is now called Deutsche Post DHL.

Editor:Xiong Qu |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program