(Yicai Global) Feb. 15 -- STO Express slumped as much as 5.5 percent today after the Chinese express delivery giant said it is planning to distribute shares at an 87.8 percent discount on today’s trading price to key executives and top achievers as part of an employee stock ownership scheme.

STO Express’ share price [SHE:002468] was trading down 5.42 percent at CNY8.20 (USD1.30) as of 2 p.m. China time, giving it a market capitalization of CNY12.5 billion (USD2 billion). Earlier in the day it had slid to CNY8.19.

STO Express plans to distribute almost 20 million shares, or just over 1 percent of total share capital, to core staff at a price of CNY1 (USD0.16) if certain performance targets are met, the Shanghai-based courier said yesterday.

The firm, which is bracing for losses of up to CNY950 million (USD149.5 million) last year, must turn profitable this year, and net profits should reach at least CNY500 million (USD78.7 million) by 2023, it said. It is also requiring that delivery volumes increase by at least the overall industry level this year and next.

The company will hand over 14.4 million shares at first with the remainder to be transferred over the next six years, it added. There will be a three-year lock-up period for the stock. The beneficiaries would mainly be top executives with Director and General Manager Wang Wenbin planning to subscribe to 15.24 percent of the total on offer.

STO, which made a profit of CNY36.3 million (USD5.7 million) in 2020, has been pushed into the red due to intense competition in the express delivery sector and a reduction in some income lines as the firm adjusted its market strategy, it said.

Editor: Kim Taylor