STRONG DELIVERY

One of China’s richest men presides over an army of 80,000 couriers and 30 planes

Obsession
Shenzhen
Obsession
Shenzhen

A few decades ago Wang Wei was personally lugging suitcases and backpacks across China’s southern border, trying to make his fledgling Hong Kong-based courier business a success. This week he became China’s third-richest man, thanks to his newly listed company doing well on the Shenzhen Stock Exchange.

As of March 2, the chairman of Shenzhen-based SF Express had a net worth of $27.6 billion. That puts him behind only property tycoon Wang Jianlin and Alibaba’s Jack Ma on the list of China’s richest individuals, according to the Bloomberg Billionaires Index.

Wang, 46, founded the courier in 1993 and owns a 68% stake. From the beginning of this year, his paper worth has jumped 489%, according to Bloomberg, thanks largely to the so-called backdoor listing last week of SF Holding, the operator of SF Express.

Last year SF Holding struck a $6.6-billion reverse-merger deal with a publicly traded metals firm, allowing it to skip ahead on a waiting list for IPOs. The resulting shell company formally changed its name to SF Holding. After listing, the shares shot up 10%, the daily limit allowed by Chinese exchanges, for four straight sessions. Had the share price not fallen a bit on March 1 and 2—after financial media house Caixin reported (link in Chinese) that regulators are closely watching the shares’ transactions—Wang would perhaps now be China’s richest man.

Despite the dip, SF Holding is now the most valuable stock on the tech-oriented Shenzhen bourse, with a market cap of over $29 billion. Its price-earnings ratio has reached more than 800 times, compared to around 30 times for its Chinese peers, according to Bloomberg data. This indicates that Wang’s company is likely overvalued.

China’s logistics sector has grown rapidly in the past few years thanks to the country’s e-commerce boom, largely powered by tech giant Alibaba. ZTO Express, China’s second-biggest courier, went public in New York last October, while three other major players also listed on the mainland through reverse-takeover deals last year.

SF Holding’s net profit for 2016 surged 112% year-on-year to 4.18 billion yuan ($608 million), according to the company’s latest financial report (link in Chinese).

SF Holding has 117,000 employees, of whom nearly 80,000 are couriers. It also owns a fleet of 15,000 cargo vehicles and 31 aircraft. Last month, the company announced it will build its own airport in the central Chinese city of Ezhou, with completion expected by 2020 (link in Chinese).

China made private courier firms legal in 2009. Before that they operated in a grey area, and authorities would fine them (link in Chinese) from time to time.

Wang started the business from a street shop in Hong Kong’s working-class neighborhood of Mong Kok. He did have a little help: a loan from his father of less than $20,000.

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