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China's ZTO Express seeks to raise up to $1.55 billion in Hong Kong listing

FILE PHOTO: The logo of ZTO Express is seen in Beijing, China October 27, 2016. REUTERS/Jason Lee

HONG KONG (Reuters) - Chinese delivery group ZTO Express ZTO.N aims to raise up to $1.55 billion in the Hong Kong Stock Exchange, according to the company's filings, the latest in a series of secondary listings to be carried out in the city this year.

ZTO Express, which is already listed in New York, begins its institutional bookbuild on Wednesday and will sell 45 million shares at a maximum price of HK$268 ($34.60) per share, the filings showed.

Final prices of the shares will be set next Tuesday and the stock is due to start trading in Hong Kong on Sept. 29.

In case of high demand, a so-called ‘greenshoe’ option can be exercised and an extra 6.75 million shares can be sold within the next 30 days by the banks which underwrote the deal, according to a term sheet seen by Reuters.

The option, if exercised, could raise an additional $233 million at the maximum share price.

Hong Kong retail shareholders will be able to bid for up to 5% of the company’s stock being sold, the term sheet showed.

Nearly $12 billion worth of secondary listings have been carried out in Hong Kong in 2020, according to Refinitiv data, even as the city struggled with the economic fallout of the coronavirus outbreak and anti-government protests.

The increase in secondary listings comes as the U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards. A secondary listing in Hong Kong, bankers say, makes it easier for companies to switch their primary listing venue in the future.

ZTO Express shares fell by 1.1% to $31.37 on Tuesday in New York but the stock is trading about 34% higher so far this year.

Reporting by Scott Murdoch; Editing by Ana Nicolaci da Costa

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