Alibaba Group-backed Chinese logistics firm Best Inc on Tuesday slashed the expected price range of its U.S. initial public offering, one day before its market debut, suggesting tepid investor enthusiasm.
Best expects its offering of 45 million American depository shares (ADS) to be priced at US$10 to US$11 per ADS, it said in a filing with U.S. securities regulators.
The company had initially expected a price range of US$13 to US$15 per ADS and an IPO consisting of 53.56 million new shares and 8.54 million existing shares.
Best, founded by former Google executive Johnny Chou, faces stiff competition from fellow Chinese logistics firms such as S.F. Holding, YTO Express and STO Express, all of which recently went public in China, the world's biggest logistics market.
Best was banking on China's booming logistics market to justify its valuation, but concerns over competition, along with rising fuel and labor costs prompted some investors to balk at Best's initial pricing, Reuters reported earlier on Tuesday.
Best reported a net loss of 623.8 million yuan (US$94.9 million) for the six months ended June 30. Total revenue rose 133.5 per cent to 8.10 billion yuan, driven by its freight and express delivery business.
Chinese e-commerce company Alibaba (BABA.N), led by Jack Ma, holds a 23.4 per cent stake in Best.