Chinese Container Shipping Operator Zhonggu Eyes $218m In Shanghai IPO

Shanghai Zhonggu Logistics Co., Ltd, a container logistics solution provider, is planning to raise 1.48 billion yuan ($218 million) in an initial public offering (IPO) on the main board of the Shanghai Stock Exchange. 

The company, which kicked off its subscription exercise on September 16, has offered up to 66.67 million common shares at 22.19 yuan ($3.28) apiece. Its shares have been oversubscribed 7,496 times, according to a company filing on September 18. 

Zhonggu plans to use the IPO proceeds to purchase containers and container ships. 

Beijing-based investment bank China International Capital Corporation Limited (CICC) is the lead underwriter for the deal. Zhonggu will float the shares under the symbol “603565”.

With 120 container ships and tens of freight routes across the country, it offers door-to-door logistics solutions to enterprises. 

Global leading data intelligence institute for line operators Alphaliner ranked Zhonggu No. 13 on the list of Top 100 Carriers 2019, it said. 

Its annual revenues over the past three years stood at 9.9 billion yuan ($1.46 billion) in 2019, 8.08 billion yuan ($1.19 billion) in 2018 and 5.6 billion yuan ($826 million) in 2017. As of December 2019, it booked a net profit of 86 million yuan ($127 million), up 309 million yuan ($45 million) than the previous year, according to its prospectus.

Following the IPO, Zhonggu Shipping will remain the largest shareholder in Zhonggu Logistics with 63.13 per cent. Its other shareholders include SoftBank’s SBCVC (2.23%) and supply chain focused Eastern Bell Capital (1.18%).

SBCVC had made an undisclosed amount of strategic investment in Zhonggu Logistics in 2017.  Subsequently, Zhonggu Logistics has closed two rounds of funding from the state-backed Shanghai Free Trade Zone Equity Fund (FTZ Fund) in 2017 and Eastern Bell Capital in 2019.