A planned 3 billion yuan convertible bond issuance by Sto Express Co.,Ltd. was abruptly halted just three days before its scheduled review. The trigger was a formal investigation notice from the State Post Bureau. On August 4, the bureau announced that throughout the year, businesses operating under the "Sto Express" trademark, name, and waybill system had experienced multiple production safety incidents, with safety hazards repeatedly found at various sites. Sto Express Co.,Ltd. was found to have a deficient safety management system for its affiliated companies, failing to implement unified safety standards, leading to the formal investigation.
On the evening the investigation was made public, Sto Express Co.,Ltd. issued an announcement stating it had unanimously voted to terminate the convertible bond issuance to unspecified investors and withdraw the application documents, with its sponsor, Citic Securities, simultaneously submitting a withdrawal request. On August 6, the Shenzhen Stock Exchange officially ended the review of the project. This financing plan, initiated in March and lasting nearly five months, came to a sudden halt.
Strong Revenue and Profit Growth, but Tripped by Safety Incidents
Less than a month before the investigation, Sto Express Co.,Ltd. had just released impressive financial results. According to its semi-annual performance forecast, the company expects net profit attributable to shareholders for the first half of 2026 to be between 950 million yuan and 1.06 billion yuan, a year-on-year increase of 109.6% to 133.9%. Net profit excluding non-recurring gains and losses is projected to fall within the same range, showing a 117.7% to 143.0% increase compared to the same period in 2025. Based on first-quarter data, the company's second-quarter net profit attributable to shareholders is estimated at 491 million yuan to 601 million yuan, a year-on-year increase of 126.3% to 177.0%.
Analysis of monthly operational briefings shows that Sto Express Co.,Ltd.'s express delivery business revenue for the first half of the year totaled 32.074 billion yuan, a significant year-on-year increase of nearly 30.0%. The total business volume reached 14.3 billion parcels, a 15.8% increase from the first half of 2025. The average monthly revenue per parcel was 2.26 yuan, compared to 2.00 yuan in the same period of 2025. Based on the national total of 100.38 billion parcels for the reporting period, the company's market share was approximately 14.2%, slightly higher than the 13.1% in 2025.
However, the robust performance stood in stark contrast to the outbreak of compliance risks. The prospectus for Sto Express Co.,Ltd. revealed that from 2023 to 2025, the company and its significant subsidiaries faced a total of 52 administrative penalties with fines of 10,000 yuan or more, amounting to 3.045 million yuan. Of these, 27 were related to production safety, with total fines of approximately 493,800 yuan. The main reasons included failing to take measures to eliminate safety hazards, using safety equipment not meeting standards, and failing to provide safety education and training to employees as required.
According to a compilation of public reports, in July 2024, two traffic accidents involving Suzhou branches of Sto Express Co.,Ltd. led to an interview with the Suzhou Post Administration. In September of the same year, a telescopic conveyor collapsed at the company's Heilongjiang sorting center, resulting in one employee fatality. In February 2025, one of the company's outlets was exposed for illegally shipping fireworks. In July, a Fuzhou business office incepted two shipments of the prohibited item anhydrous ethanol, violating the inspection system. In June 2026, a company truck on a main route in Yongji, Shanxi, caught fire, destroying over 5,300 parcels.
While Sto Express Co.,Ltd. attempted to characterize these safety-related administrative penalties as "not constituting major illegal activities" in its response to inquiries, the formal investigation ultimately became the final straw that broke the back of its financing plan.
The Structural Challenge of the Franchise Model
As one of the earliest private courier companies to build a large-scale terminal network using a lightweight asset franchise model, Sto Express Co.,Ltd. currently operates a "directly-operated transit hubs, franchised outlets" model. The headquarters builds and manages sorting centers and transit hubs, handling sorting, weighing, scanning, and trunk-line transportation. Service outlets are operated by independent franchisees, handling branch-line transport, parcel collection, and delivery. In this model, the headquarters and franchisees are partners, not in a vertical management relationship. By the end of 2025, the company had 5,075 franchised outlets and 98,000 service points and stations, employing approximately 248,000 regular couriers. However, the company only had 12,600 full-time employees during the reporting period. This lengthy control chain means that safety policies from headquarters can be diluted as they are passed down.
In terms of profit distribution, the headquarters handles unified settlement for all costs. The originating outlet pays the courier company for waybill fees, material fees, transfer fees, and delivery fees, while the headquarters pays the receiving outlet's delivery fee. To compete for market share, the headquarters engages in brutal price wars, leaving franchisees with meager profits after deducting these costs. They must also cover fixed operating costs like rent, labor, vehicles, and equipment, making long-term safety investments—such as fire upgrades, equipment maintenance, and employee safety training—the most easily cut items. The headquarters enjoys brand premiums and scale benefits but lacks effective control over franchisee safety management. The franchisees bear the actual operational risks and safety responsibilities but lack the profit margins and incentive to proactively implement safety rules. The safety incident risks at Sto Express Co.,Ltd. may be an inevitable exposure of the structural deficiencies of the franchise model at a specific stage of development.
Second Failed Refinancing Attempt: Does the Company Really Need Money?
Since its backdoor listing in 2016, this marks the second unsuccessful refinancing attempt for Sto Express Co.,Ltd. Previous filings show that in July 2021, the company planned a private placement of up to 3.5 billion yuan, primarily for multi-functional network hub construction and sorting center automation upgrades. However, due to a net loss and declining market share, the plan expired automatically in August 2022. This time, the convertible bonds aimed to raise up to 3 billion yuan, with 2.137 billion yuan allocated for a "smart logistics equipment upgrade project" to purchase various automation and sorting equipment, and 863 million yuan for a "trunk-line transport capacity enhancement project" to purchase vehicles, including new energy trucks and trailers.
On paper, Sto Express Co.,Ltd. is not short of cash. As of March 31, 2026, the company had approximately 1.63 billion yuan in cash and bank deposits, and about 1.315 billion yuan in trading financial assets like bank wealth management products, trust products, and structured deposits, totaling nearly 3 billion yuan, roughly matching the planned fundraising amount. Holding nearly 3 billion yuan in cash and assets while seeking an equal amount from the market raised regulatory questions about the necessity of the investment projects and the rationality of the financial arrangement.
In its response to the Shenzhen Stock Exchange's inquiry, Sto Express Co.,Ltd. stated that after considering its future cash needs for three years, including dividends, operating expenses, and debt repayment, it estimated a capital surplus of about 733 million yuan. Given the total planned investment of 4.751 billion yuan for the projects, the company still faces a funding gap of 4.018 billion yuan. The company acknowledged that as of June 30, 2026, it had 16.47 billion yuan in unused bank credit lines, which is sufficient to cover the gap. However, debt financing would inevitably increase its debt pressure and financial expenses.
Historical financial data shows that from 2021 to 2025, the company's debt-to-asset ratio rose from 58.0% to 62.7%. In the first quarter of 2026, the ratio was about 62.1%, significantly higher than the industry average of 47.4%. Short-term debt repayment pressure is particularly acute. The current ratio and quick ratio have both fallen below 1.0 since 2022. As of March 31, 2026, the company had 3.782 billion yuan in short-term borrowings and approximately 780 million yuan in non-current liabilities due within one year. In the first three months alone, financial expenses reached 61.52 million yuan, compared to 59.79 million yuan in the same period of 2025.
The capital market has always been skeptical of Sto Express Co.,Ltd.'s financing needs, but the company's capacity bottleneck is urgent. According to its inquiry response, during the peak season in November 2025, its average daily loading rate reached 97.9%, with nearly one-third of volume relying on externally rented capacity. The average daily capacity utilization rate at its sorting centers was 95.3%, requiring extended working hours and temporary staff to handle peak pressure. By the end of 2025, approximately 19.3% of the company's machinery and equipment were nearing the end of their useful life or were slated for replacement, and the renewal rate of its transportation vehicles was only 45.6%.
Performance growth creates a need for financing, but compliance risks block the funding lifeline, trapping Sto Express Co.,Ltd. in a "growth paradox." Without establishing an effective shared safety responsibility mechanism between the headquarters and franchisees, a model relying solely on performance data to gain capital trust will be unsustainable.
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