Produced by Leida Finance | Written by Ding Yu | Edited by Meng Shuai

STO Express, a major player in the delivery sector with a market valuation exceeding 20 billion yuan, has once again come under scrutiny due to safety concerns.

On August 4, the State Post Bureau issued a notice accusing STO Express Co., Ltd. of inadequate safety production management across its affiliated entities and failing to implement unified safety measures as required. Consequently, the bureau has launched a formal investigation into the company.

This marks the second instance this year where a prominent domestic delivery company has been investigated by the State Post Bureau for similar issues, following J&T Express in June.

In response to the investigation, STO Express has decided to withdraw its previously proposed 3 billion yuan convertible bond issuance plan.

STO Express has stated that it will take immediate corrective actions, fully cooperate with the investigation, strengthen unified management of its directly operated outlets, franchisees, and suppliers, and enhance safety compliance across its network.

Notably, STO Express has demonstrated steady performance growth in recent years, largely due to its ongoing professional reforms. In the first half of this year, the company anticipates reporting a net profit attributable to shareholders ranging from 950 million to 1.06 billion yuan, representing a year-on-year increase of 109.59% to 133.85%.

However, despite this significant performance improvement, STO Express has frequently faced regulatory scrutiny, and its compliance issues remain a concern.

As of the market close on August 6, STO Express's stock price stood at 13.92 yuan per share, with a total market value of 21.309 billion yuan.

Under Investigation by the State Post Bureau, Withdraws 3 Billion Yuan Convertible Bond Plan

On August 4, the State Post Bureau announced the initiation of a formal investigation into STO Express Co., Ltd.

According to the announcement, entities using the "STO Express" trademark, brand name, and shipping labels for express delivery services have experienced multiple safety incidents this year, with safety hazards repeatedly identified during inspections.

The State Post Bureau pointed out that STO Express Co., Ltd. had failed to adequately manage safety production across its affiliated enterprises and had not implemented unified safety measures as required, prompting the investigation.

In response to the investigation, STO Express promptly stated its full acceptance and commitment to complying with the decision. The company acknowledged the critical importance of safety for society, the industry, and its own development, recognized the gaps in its unified management responsibilities, and appreciated the regulatory authorities' intention of "strict supervision as a form of deep care." STO Express pledged to take immediate corrective actions and fully cooperate with the investigation.

STO Express emphasized, "Safety is an unbreakable bottom line and a non-negotiable red line. We sincerely apologize to all friends who care about, support, and choose STO Express."

The company revealed that its Safety Production Committee has launched a special rectification campaign, aiming to comprehensively improve safety compliance across the network through measures such as reviewing safety protocols, restructuring the safety department, clarifying business safety responsibilities, implementing regional safety accountability, introducing safety performance assessments, and reinforcing a "one-vote veto" system for safety results. The company remains committed to unified management of its directly operated outlets, franchisees, and suppliers.

STO Express also stated that its network operations are currently normal, with all services running smoothly and orderly.

Leida Finance noted that on August 4, STO Express announced that its wholly-owned subsidiary, STO Express Co., Ltd., had received a notice from industry regulatory authorities regarding an investigation into suspected failures to fulfill unified safety management responsibilities.

As of the announcement date, the investigation was still ongoing. After thorough communication with relevant parties and careful analysis, the company decided to apply for the withdrawal of its application documents for the issuance of convertible corporate bonds to unspecified investors.

According to STO Express's previously disclosed application materials, the planned fundraising amount for this issuance did not exceed 3 billion yuan.

Of this total, 2.137 billion yuan was earmarked for the "Smart Logistics Equipment Upgrade Project," and 863 million yuan for the "Trunk Transport Network Enhancement Project." The total planned investment for these two projects was 4.751 billion yuan.

The Shenzhen Stock Exchange had conducted a series of review inquiries regarding STO Express's issuance of convertible corporate bonds, with a particular focus on content related to administrative penalties.

In its response on July 27, STO Express disclosed that from 2023 to 2025, the company and its key subsidiaries had received a total of 52 administrative penalties with fines of 10,000 yuan or more, amounting to cumulative penalties exceeding 3.04 million yuan.

Among these, 19 penalties were postal-related, totaling 575,600 yuan; 27 were safety production-related, totaling 493,800 yuan; and 6 were of other types, totaling approximately 1.9756 million yuan.

However, the number of administrative penalties received by the company and its key subsidiaries has shown a year-on-year declining trend, with 28 penalties in 2023, 18 in 2024, and 6 in 2025.

Professional Reforms Yield Significant Results, First-Half Profit Expected to Double

According to Tianyancha, STO Express Co., Ltd. was registered in November 2001 and subsequently listed on the Shenzhen Stock Exchange's main board in 2016 through a backdoor listing via Aidi West.

Reviewing STO Express's development history, the company once experienced rapid growth. For a long time until 2014, STO Express held the largest market share in the industry. However, the company later fell behind significantly, with ZTO Express dominating the top spot for many years.

According to the company's 2025 annual report, STO Express handled 26.139 billion express deliveries last year, up 15% year-on-year, with a market share of 13.14%, regaining its position among the top three in terms of business scale.

STO Express's positive changes were largely attributed to its professional reforms initiated earlier.

At the 11th Express "Last Mile" Conference held in November last year, Qin Lei, Deputy Secretary of the Party Committee and Vice President of STO Express, stated that the company had fully launched professional reforms in 2021 and achieved a V-shaped recovery through its efforts.

Qin Lei noted that from a volume perspective, STO Express regained its top-three position in nominal delivery volume by mid-year; in terms of quality, the company led among franchised and even the entire industry in platform indices, timeliness, and postal complaints; significant improvements were also seen in safety, costs, labor efficiency, and pricing. Notably, during a phase when market competition shifted from a "blue ocean" to a "red ocean," franchised outlets remained relatively stable, with the Prosperity level (market sentiment) improving against the trend.

From a performance perspective, STO Express's reforms have indeed yielded remarkable results. In 2022, the company's revenue successfully surpassed the 30 billion yuan mark, increasing by 33.32% year-on-year to 33.671 billion yuan; its net profit attributable to shareholders also turned from loss to profit, reaching 288 million yuan.

In the following years, STO Express's performance generally maintained a steady growth trend. In 2025, the company achieved annual revenue of 55.586 billion yuan and a net profit attributable to shareholders of 1.369 billion yuan, marking its best post-pandemic performance.

Entering 2026, STO Express delivered another strong first-quarter report. In the first quarter of this year, the company achieved revenue of 15.686 billion yuan, up 30.74% year-on-year; its net profit attributable to shareholders was 459 million yuan, a year-on-year increase of 94.29%.

In mid-July, STO Express released its semi-annual performance forecast, projecting a net profit attributable to shareholders ranging from 950 million to 1.06 billion yuan for the first half of the year, representing a year-on-year increase of 109.59% to 133.85%.

Regarding the substantial profit growth, STO Express stated that in the first half of this year, amid the continued implementation of industry anti-price-war policies and a rational recovery in industry pricing, the company actively adjusted its business strategies, improved its dual-network collaboration layout, protected the rights and interests of end (last-mile) service providers, and focused on digital and intelligent transformation to enhance its overall core competitiveness.

Frequent Regulatory Scrutiny, Compliance Challenges Persist

Leida Finance noted that while the company has achieved rapid performance growth, STO Express has frequently faced regulatory scrutiny in recent years.

According to China Jilin Web, during the initial stages of STO Express's reforms, the industry was mired in a price war, leading to issues such as suspended deliveries, franchisee owners fleeing, and package backlogs in some regions.

At that time, local postal regulatory authorities in multiple regions intervened to urge STO Express's headquarters to resolve package backlogs, with penalties primarily imposed on STO Express's subsidiaries and franchised outlet operators in various regions, ranging from thousands to tens of thousands of yuan.

In 2024, a telescopic conveyor collapse at STO Express's sorting center in Heilongjiang Province resulted in the death of one employee. In September of that year, the Market Regulatory Department of the State Post Bureau conducted an administrative interview with STO Express Co., Ltd.

The interview pointed out that the accident fully exposed the company's weak commitment to safety development, inadequate implementation of safety production subject responsibilities and headquarters' unified safety management responsibilities, non-compliant installation and use of equipment such as telescopic conveyors, lack of standardized safety production management, inadequate rectification of "four nos" (no safety training, no safety measures, no supervision, no accountability) issues in handling facilities, missing safety education and training for employees, and prominent issues such as violation of homework rules (non-compliant operations) and failure to adhere to regulations, offering profound lessons.

According to STO Express's disclosures, among the 52 administrative penalties with fines of 10,000 yuan or more received by the company and its key subsidiaries from 2023 to 2025, 27 were safety production-related, representing the highest proportion of penalty types.

In 2026, postal regulatory authorities at all levels have conducted frequent interviews with STO Express. In January, in response to persistent cross-regional operations by an STO Express-licensed enterprise in Shanghai within the Wujiang area, despite repeated prohibitions, the Suzhou Postal Administration, in conjunction with the Wujiang Postal Industry Development Center, interviewed STO Express's headquarters and Shanghai regional office.

The Wujiang Postal Center reported the enterprise's continued illegal operations and evasion of regulatory oversight in Wujiang, with three confirmed violations in 2025, two of which involved cross-regional operations.

Currently, the enterprise's relevant business personnel continue to illegally solicit packages in Wujiang using more covert methods, severely disrupting the local express delivery market order and evading source supervision for delivery safety, posing significant risks.

The Suzhou Postal Administration pointed out that the enterprise had five violation records in Suzhou since 2023, four of which involved cross-regional operations, with repeated prohibitions failing to curb the illegal behavior, for which the brand headquarters bore management responsibility.

On March 3, the Beijing Postal Administration interviewed STO Express's Beijing company, pointing out irregularities in its operations, such as arbitrary adjustments to operational rules, unstable network operations, subpar service quality, and inadequate implementation of measures to protect the rights and interests of delivery personnel.

In late March, the Shaanxi Postal Administration successively conducted administrative interviews with the provincial headquarters of five franchised express delivery companies—ZTO, YTO, STO, Yunda, and J&T Express—requiring them to fulfill their unified management responsibilities.

Simultaneously, the Guangxi Postal Administration also conducted a collective interview with the national headquarters of the ZTO, YTO, STO, Yunda, and J&T Express brands operating in Guangxi, demanding strict adherence to regional scope disclosures and service standards, improvement of delivery method and completion standard inquiries, and optimization of user complaint handling and accountability.

On July 1, the Hunan Postal Administration announced that it had interviewed the Hunan provincial headquarters of five express delivery brands—ZTO, YTO, Yunda, STO, and J&T Express—regarding service network stability risks in certain regions of Hunan, requiring each enterprise to fulfill its primary responsibility for unified management of its service network.

After interventions by provincial postal regulatory authorities, the State Post Bureau has now personally initiated a formal investigation into STO Express Co., Ltd.

Moving forward, whether STO Express can further address its compliance gaps while sustaining performance growth remains to be seen. Leida Finance will continue to monitor the situation.