5 Hot IPOs That Hedge Funds Couldn’t Ignore

3. ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO)

Top Hedge Fund Backers: 1. Zimmer Partners (3.64 million shares) 2. Segantii Capital (1.08 million shares) 3. Millennium Management (1.07 million shares)

ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) was the biggest IPO of 2016, with proceeds of $1.4 billion being raised by the firm, which eschewed the option to go public in China for a number of reasons. One was the fact that founder Meisong Lai would be able to retain control over his company despite only owning 28% of shares after the IPO, thanks to the U.S markets allowing for classes of shares with different voting rights, which China does not.

However, ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) has not fared particularly well since its debut, sliding to $13 per share and under $10 billion in market cap. Given the expected growth of nearly 24% annually through 2020 in the Chinese express delivery market, ZTO Express appears to be a relative bargain at the moment, trading at just 19-times 2017 expected earnings. That mark is also significantly lower than its Chinese rivals, which trade for as much as 106-times forward earnings. 24 hedge funds in our system bought shares of ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) in the fourth quarter.

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