ALIBABA Group Holding Ltd. will take a 14 percent stake in STO Express Co. through a US$693 million deal.

Shares in STO Express shot up yesterday when trading opened and immediately hit the upper 10 percent limit on the Shenzhen Stock Exchange.

STO Express said in a statement yesterday its controlling shareholder planned to set up a new subsidiary that will own a 29.9 percent stake in the courier firm.

Alibaba will in turn invest 4.66 billion yuan (US$693.44 million) for a 49 percent stake in the new subsidiary, and by extension hold more than 14 percent of STO Express, the statement said.

Alibaba, in a separate statement, confirmed its investment in “one of the top five express delivery companies in China.”

“We will deepen our existing collaboration with STO Express in technology, last-mile delivery across China and New Retail logistics,” it said.

“This investment is a step forward in our pursuit of the goal of 24-hour-delivery anywhere in China and 72 hours globally,” Alibaba added.

STO Express is Alibaba’s fourth investment in the Chinese courier sector after it acquired minority stakes in YTO Express Group Co., Best Inc. and ZTO Express (Cayman) Inc.

STO Express is one of several companies that works with Aliba- ba under Cainiao, its logistics division launched in 2013.

Cainiao provides software and shares data with warehouses, carriers and other logistics companies that help deliver packages to shoppers on Tmall and Taobao, Alibaba’s largest e-commerce sites.

Cainiao works with a number of logistics companies to ensure packages are delivered and vendors paid. (SD-Agencies)