According to Virtus International, a Chinese package delivery company has won the accolade of biggest US IPO of 2016 raising some $1.4 billion as it debuted on the New York Stock Exchange earlier this week.

The ZTO Express IPO gives the Shanghai-based company a market value of more than $12 billion and vindicates its backers’ bet on a continuation of China’s booming online-shopping industry.

The IPO is the largest by a Chinese company since the November 2014 debut of e-commerce giant, Alibaba Group Holdings and will see it use the bulk of the capital raised to purchase additional trucks, land and facilities. The company chose to list in New York because of a large backlog of companies awaiting approval from Chinese regulators to go public on China’s two main exchanges in Shanghai and Shenzhen.

“This IPO shows that there is still plenty of life in the Chinese e-commerce space,” said Haraku Maramuto, an equity market strategist at Virtus International.

“There has been a lot of skepticism towards the sustainability of the appetite for Chinese IPOs in the investment community but the fact that ZTO Express was able to sell some 72.1 million shares at $19.50, a price higher than its initial target range of between $16.50 and $18.50 seems to indicate that such cynicism may be a little premature.”

China’s logistics companies handled more than 20 billion packages in 2015, 1.5 times the volume in the United States and all indications are that 2016 will show an increase on last year.

Virtus International says it expects the market to grow by more than 20% a year through to 2020 with volume pegged to reach some 60 billion parcels.

About Virtus International:
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