China's ZTO NYSE debut marks largest US IPO of 2016

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Chinese package delivery company ZTO Express debuted on the New York Stock Exchange (NYSE) on Thursday morning, opening at 18.40 US dollars a share.

ZTO raised over 1.4 billion US dollars in the biggest initial public offering (IPO) in the US of the year. It surpassed the 1.1 billion US dollar IPO of Japanese messaging company Line in July, and was the biggest Chinese IPO in the US since Alibaba in 2014.

ZTO priced its IPO of 72,100,000 American Depositary Shares at 19.50 US dollars a share for a total offering size of approximately 1.4 billion dollars.

Morgan Stanley and Goldman Sachs Group were the lead IPO underwriters.

However, shares in ZTO tumbled 15 percent to 16.57 dollars at the closing bell on Thursday.

"The short-term fall of ZTO's stocks won't affect my confidence in our company's long-term run. We believe that our business will keep growing at a fast pace relying on China's huge and rapidly expanding express service market as well as e-commerce market," said Lai Meisong, the founder and chairman of ZTO.

China is the world's largest market for delivery services, with total parcel volume of 20.7 billion in 2015, approximately 1.5 times the total parcel volume of US, according to data from consulting firm iResearch cited in the ZTO prospectus.

The Shanghai-based company provides express delivery services as well as other value-added logistics services through its network across China. It covered over 96 percent of China's cities and counties as of June 30, 2016.

ZTO is both a key enabler and a direct beneficiary of China’s fast-growing e-commerce market, and has established itself as one of the largest express delivery service providers for millions of online merchants and consumers transacting on leading Chinese e-commerce platforms, such as Alibaba and JD.com.