ZTO Sued Over `Untrue Statements’ in Biggest U.S. IPO in 2016

By Erik Larson, Bloomberg News

ZTO Express Inc., the Chinese delivery service that had the biggest U.S. initial public offering in 2016, was sued by an investor for allegedly inflating profit margins to exceed industry peers and lure investors.

The Shanghai-based company, which gets most of its business from Alibaba Holding Group Ltd., uses a system of “network partners” to handle lower-margin pickup and delivery services, keeping less-profitable business off its books, according to a class-action filed in Alabama state court by the city of Birmingham’s pension fund. The arrangement omits the “crucial realities” of the industry, it said.

“By ...