(Yicai Global) Sept. 2 -- YTO Express Group’s stock price more than tripled in Hong Kong after a unit of Alibaba Group Holding paid CNY6.6 billion (USD966.5 million) to lift the e-commerce giant’s stake in the courier.

YTO’s shares [HKG:6123] surged 259 percent to end trading at HKD7.15 (92 US cents) each. They climbed much as 277 percent earlier in the day. In Shanghai, the company’s stock [SHA: 600233] jumped by the maximum 10 percent limit to CNY18.37 (USD2.69).

Alibaba China Technology bought a 12 percent stake in YTO, the Shanghai-based courier said in a statement yesterday. Alibaba and its affiliates now have a combined 22.5 percent stake in China’s third-largest delivery firm by parcel volume. YTO had a 14 percent market share last year. 

Alibaba and its affiliates have invested in a number of couriers to build a logistics network for the e-commerce company. They also own 29.1 percent of Best Express; 7.3 percent of ZTO Express; 14.7 percent of STO Express; and 2 percent of Yunda Holding.

The stakes serve two purposes, according to Citic Securities' analyst Liu Zheng. The first is to ensure that merchants on Alibaba’s platforms have a wide choice of top notch delivery firms. The second is to beat out rivals, which include Pinduoduo and JD.Com, in the quest for more logistics resources.

Alibaba, YTO and Alibaba's Cainiao Logistics will coordinate their express services, air freight, international networks and supply chains, and information technology.

With 12 cargo planes, YTO has been deeply involved in Cainiao's global parcel operations since the Covid-19 pandemic broke out, running cross-border trade and counter-epidemic flights to Malaysia, Pakistan and other countries. A logistics hub in Hong Kong in which YTO and Cainiao co-invested is under construction.

YTO and Cainiao will jointly develop and operate advanced express logistics equipment, devise intelligent logistics big data applications, and further digitize and intelligentize YTO's operations.

Net profit at YTO jumped 12.6 percent to CNY971 million (USD142.3 million) in the first half from a year earlier. Operating revenue rose 4.5 percent to CNY14.6 billion as business volume climbed 30 percent to over 4.9 billion units.

Shanghai Yuantong Jiaolong Investment Development Group still holds the majority of equity in YTO. With more than a 41 percent stake, husband-and-wife co-founders Yu Weijiao and Zhang Xiaojuan are the firm’s actual controllers.

Editors: Zhang Yushuo, Ben Armour