Beijing (PingWest)—ZTO Express, an NYSE-listed Chinese logistics company, is set to raise nearly $1.3 billion ahead of its market debut in Hong Kong on Sept. 29.

The Shanghai-headquartered express company plans to sell 45 million shares, including 2.25 million shares to retail investors in Hong Kong, representing about 5% of its global offering, according to a prospectus filed with the US Securities and Exchange Commission last week. 

The Chinese courier is guiding investors that it will price its stock sale at 218 Hong Kong dollars each, the equivalent of $28.12. That represents a nearly 2% discount to ZTO's closing price in New York on Monday.

ZTO Express, in which Alibaba owns an 8.7 % stake, said it plans to use the proceeds of the stock sale to further develop its infrastructure and capacity, to strengthen its network, and to invest in its logistics ecosystem. The company said its delivery network covers 99.2% of cities and counties across China.

Cainiao, the logistics arm of Alibaba, is strengthening collaboration by increasing investment in courier companies, including ZTO Express, YTO Express, STO Express, and Yunda.

The e-commerce giant has acquired a 2% stake in Shenzhen-listed logistics company Yunda in April. Later, in Sept., the company increased its stake in YTO Express from 10.5% to 22.5%.

Alibaba invested an additional 23.3 billion yuan ($3.44 billion) in Cainiao in November last year, boosting its holdings in the logistic unit to approximately 63% from 51%.