ZTO Express Targets Largest Chinese Company IPO in U.S. This Year

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ZTO Express is planning what could be the largest initial public offering by a Chinese company in the United States in 2016 and the biggest since Alibaba’s IPO two years ago.

The Shanghai-based logistics company wants to sell 72.1 million American depository receipts (ADRs) at a price of between $16.50 and $18.50 for each, according to regulatory filing made on Friday.

At the upper price, ZTO Express would raise more than $1.3 billion in the IPO. The amount could further rise to $1.5 billion in the event of an overallotment option being fully exercised. The IPO could be the largest by a Chinese company in the U.S. this year and the largest since 2014 when Alibaba Group Holding went public. It would also rank seventh all-time among Chinese companies’ IPOs on an American exchange, based on Bloomberg data.

Ecommerce giant Alibaba was able to raise $25 billion in its offering two years ago – the amount was the highest of such ever recorded.

Founded in 2002, ZTO Express is a major player in China’s thriving online-shopping industry. It delivers packages for online retailers such as Alibaba and JD.com. The company revealed in its IPO prospectus that the number of packages it handled increased 62 percent last year to 2.9 billion.

China boasts the largest express delivery market in the world. The market research firm iResearch said some 21 billion packages were delivered in the country in 2015. The total parcel volume was about 1.5 times the total in the U.S.

Of all express parcels delivered in the Asian country in the first quarter of this year, ZTO Express handled 827.7 million packages which accounted for around 14 percent, according to iResearch data quoted in the IPO prospectus. It has approximately 74 sorting hubs and 7,700 network partners.

The logistics company’s revenue surged to RMB 6.1 billion ($915.8 million) in 2015, from RMB 3.9 billion in the year before that. Net income was RMB 1.3 billion ($200.4 million). Revenue in the first six months of 2016 was $638.8 million, yielding a net income of $115.1 million.

Earlier in the year, sources informed Thomson Reuters’ IFR that ZTO Express was contemplating an American listing for speedy completion and to enable its existing shareholders monetize their holdings more easily.

The major Chinese logistics company becomes the latest company from China to aim at attracting Western investors based on growth prospects in the country. The offering will also enable it to side-step all the red tape connected to the launching of IPOs in mainland China.

ZTO Express said it will use proceeds from the offering to buy land and more trucks. The takings would also be used to build facilities, buy sorting equipment and for general corporate purposes.

In 2015, a consortium including private equity firm Warburg Pincus and Hong Kong’s Hillhouse Capital Management invested in the Chinese logistics company.

ZTO Express will be listed on the New York Stock Exchange under the ticker ZTO. The lead underwriters for the offering are Morgan Stanley and Goldman Sachs Group Inc.

Why are Payday Loan Ads Still Showing Up on Google?

Google payday loan ban

This past spring, Google announced that it would no longer allow payday loans to appear on the search engine. The tech titan stated that payday loans with excessive interest rates or unfair lending practices would be categorized as other illicit activities as selling guns, explosives and drugs. Google was celebrated for its fight against a very unpopular and controversial alternative financial product.

Has the search engine juggernaut followed through on its pledge? Reports suggest that it has not.

Five months after the website said it would exclude payday loans from its advertising system, payday loans are still popping up. The Washington Examiner reports that websites like CashNetUSA and GoInstallmentLoans are still advertising short-term, high-interest, small-dollar loans that fall outside the rules that Google has imposed in order to prohibit payday loan firms from marketing their products.

Simply put: search engine users will still see ads for results for “payday loans” or “need cash fast.”

According to Search Engine Land, there are still advertisers highlighting landing pages from Google ads that state they are complying with the new rules. However, reporters scanned the fine print for the payday loans, which show that they are just tools to get around the new payday loan policy.

It cited one passage from LoansOfSuccess.com, which informs the visitor:

“LoansOfSuccess cannot guarantee any APR, since we are a lending network. Though a Representative APR can range between 5.99 – 35.99%. The Maximum APR is 35.99. When accepting a loan from a lender, the lender can provide a different APR than our range. Please check the loan disclosure before approving and signing the agreement for your loan.”

Ultimately, in some cases, payday loan companies are in direct violation of the Google policy. Others, meanwhile, are taking advantage of other advertising methods, including call-only Google ads. Then there are the websites who don’t advertise their payday loan services but they rely Google search traffic which doesn’t seem to be affected by this “ban”.

What does Google say about these reports? Here is what one spokesperson told the news outlet:

“We continue to implement our policy and will take action on ads and advertisers that are not in compliance. These actions include removing ads and permanently banning advertisers from using AdWords.”

Thus far, Google has apparently rejected more than three million policy-violating ads.

Ostensibly, Google has achieved two things: payday lenders are further masking their actual products and terms of agreement, which could make things worse. The website is also about to play a game of whack-a-mole. Indeed, the search engine behemoth will play a role in a Sisyphean tragedy.

An array of other search engines have yet to impose similar restrictions on payday loan advertisers. Microsoft Bing, for instance, has refrained from instituting bans, but it has warned that payday loan ads tend to make compliance far more difficult. Even Facebook is looking to limit payday loan firms’ reach.

Today, not only do payday loan companies in the United States have to combat the Consumer Financial Protection Bureau (CFPB) and the vast number of jurisdictions looking to rein in the industry, they also have to enter into a fierce battle with Google. And you know that it’s nearly impossible to win with either entities!

Yahoo Reportedly Scanned Customer Emails for US Intel Agencies

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Popular Internet company Yahoo Inc collaborated with intelligence agencies in the United States to search through all the incoming emails of its customers for certain specified information, according to a Reuters report.

People who are familiar matter and speaking under condition of anonymity revealed the company had last year built a custom program in compliance with a request from the U.S. government. This tool was secretly used to scan through hundreds of millions of accounts belonging to Yahoo! Mail users.

It is not yet clear what information the American intelligence agencies were particularly interested in. Sources said Yahoo had simply been requested to scan for specific set of characters in emails and attachments. There is uncertainty over whether the Internet company has provided any information to intelligence officials and the nature of such data, if it has.

Three former employees of the company who spoke to Reuters said the request to scan through customers’ email accounts was sent as a classified edict to Yahoo’s legal team.

“Yahoo is a law abiding company, and complies with the laws of the United States,” the company told Reuters in a brief statement.

This is the first known case of an American Internet company acceding to a request by an intelligence agency to scan all of the incoming emails of customers or use purpose-built software to search for information, according to surveillance experts. The more common practice had been to search through stored messages or a small portion of total accounts.

The former Yahoo employees said Chief Executive Marissa Mayer had kept the government’s request to scan customer emails from some key members of the company’s security team. Former Chief Information Security Officer Alex Stamos did not know about the clandestine scan. He and his team reportedly only discovered the custom-built software when testing systems for vulnerabilities. It was even thought to have been installed by hackers.

Stamos, who now works on the security team of Facebook Inc., left his job at Yahoo after finding the email-scanning program had been installed by the company’s own software engineers.

It is not known if similar approach had been made by intelligence agencies to other web-based email providers. But experts said it was possible that similar demand had been made on some other Internet companies by the NSA or FBI since their targets could have been using other email services.

Two of America’s major email service providers Google and Microsoft Corp have denied ever being involved in similar scheme.

“We’ve never received such a request, but if we did, our response would be simple: ‘No way’,” a Google spokesman said in a statement.

It is hard to determine whether the requested information was needed by the FBI or NSA. Domestic surveillance requests by the latter agency are usually made through the former.

An ex-Yahoo executive who spoke to Business Insider said Mayer valued secrecy and did not give significant attention to security issues. She was afraid of cost implication and feared emphasis on security could cause a drop in Yahoo’s user base. Members of the security team were allegedly once told not to inform former CISO Justin Somaini about a particular hacking incident for fear this may be used as justification for increased funding for security.

U.S. intelligence agencies are empowered by federal laws, including the amendments made in 2008 to the Foreign Intelligence Surveillance Act, to request information that can aid intelligence gathering from phone and Internet companies operating in the country.

UK Services Sector Maintains Recovery Push Despite “Hard” Brexit Fears

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Recent findings from a major survey shows that UK’s services sector is still continuing on the path to recovery despite fears that the Brexit vote suggests economic turbulence lies ahead.

The Markit/CIPS Purchasing Managers’ Index (PMI) for the UK services sector was 52.6 last month. The figure is slightly lower than the 52.9 seen in August, but it was still enough to suggest that recovery in the sector continue since it stays above than the 50 mark.

The September PMI also beat forecasts made by analysts in a survey by Reuters.

The PMI is typically arrived at based on responses received from purchasing managers and business decision-makers from a number of companies. Figures obtained are considered an indication of how the economy is faring given they are usually released prior to official GDP data being made public.

The services sector is a major driver of the UK economy, accounting for around three quarters.

Markit believes the latest services PMI makes it more likely that the Bank of England would not be taking any more stimulus action sometime soon. This belief is further strengthened by the improvement seen in the manufacturing sector, which posted its best PMI in two years on Monday.

“The survey results suggest that the economy has regained modest growth momentum since the EU referendum, with especially strong growth appearing in manufacturing,” said Chris Williamson, chief business economist at Markit.

Williamson said the risk of the economy experiencing a recession in the second half of the year has “all but evaporated.” The Bank of England may decide not to cut rates in November as some had expected.

Many financial experts have expressed worry that the UK’s departure from the European Union could potentially drag down the economy. Surveys of businesses after the June referendum suggested a sharp drop in confidence and activity.

Improvement in business activity started in August following a significant decline recorded in the month before. It was observed that new business was added to the services sector at the fastest pace since the second month of the year. An increase has also been seen in the number of jobs available in the sector.

Data from the Office for National Statistics (ONS) indicate a 0.4 percent growth in services in July, an improvement on the figure for the month before. The UK’s leading independent producer of official statistics said July figures did not appear to have been significantly affected by the outcome of the referendum. It cautioned however that volatility could be seen in monthly data.

Last week, the ONS also revised the growth rate of the economy in the second quarter to 0.7 percent, slightly up from an earlier estimate of 0.6 percent.

Input price inflation in September was the highest reported by services firms since February 2013. This resulted in fastest growth in charges since January 2014, the BBC reported.

While the services sector appears to be on continued recovery, Williamson noted that rate of expansion has slowed since the beginning of the year amid concerns of hard times for the economy after Brexit.