Workers sort deliveries at an office of STO Express Co Ltd in Fuyang, Anhui province. The company plans to become the country's first listed express delivery company through a reverse merger with a shell entity in Shenzhen, Guangdong province. [Wang Biao/China Daily]

Shanghai-based STO Express Co Ltd is set to become the nation's first listed express delivery company through a reverse merger with a shell entity, sources said.

After nearly two months of trading suspension, Shenzhen-listed IDC Fluid Control Co Ltd announced on Wednesday that it has reached an initial agreement with STO Express for a restructuring.

Reverse merger, also called backdoor listing, helps a private company float shares by injecting its assets into a publicly traded firm.

For IDC Fluid Control, a manufacturer of faucets, taps and bathroom accessories based in Zhejiang province, the deal is considered timely and urgent. Till date, it has received two warnings pertaining to insufficient assets from the lender it was pledged to by its actual owner Zheng Yonggang 10 months ago.

For STO Express, the listing is of vital importance in its competition with Shanghai YTO Express (Logistics) Co Ltd, a Shanghai-based express delivery firm, as both seek to be the first listed company in the sector.

In the same dated announcement, STO Express confirmed its plan to go public. "This move is a response to the market trend, and an effort to make the STO Express brand bigger and stronger. The firm set a goal of going public a few years ago," it said in an announcement.

The boom in e-commerce and consumers' changing perceptions about online shopping have driven the rapid growth of the domestic express delivery market. Despite a slowing economy, the express delivery industry has maintained a high growth rate.