Connect with us

Hi, what are you looking for?



JD Logistics Launches Up to $3.4 Billion Hong Kong IPO

The logistics arm of Inc.

is looking to raise as much as $3.4 billion through an initial public offering, in the latest Hong Kong listing linked to China’s booming e-commerce market.

The IPO could value JD Logistics Inc. at up to $34 billion, filings showed on Monday. It follows share sales in the city by and another of its subsidiaries last year, which in total raised nearly $8.5 billion, according to Dealogic. relies on the unit to store and deliver groceries, clothes, home appliances and electronic gadgets across China. Over the years the parent company has used speedy delivery via JD Logistics as a way to gain an edge in its battle for market share with

Alibaba Group Holding Ltd.

The share sale could serve as a test of investor appetite for Chinese technology-related stocks. A growing economic recovery, high sector valuations, and heightened regulatory scrutiny of China’s tech giants have prompted some investors to shift their focus toward more traditional sectors and stocks that are more sensitive to swings in the economic cycle.

The company has secured seven so-called cornerstone investors, including units of

SoftBank Group Corp.

, Temasek Holdings Pte. Ltd. and

Blackstone Group Inc.

They agreed to buy a combined $1.53 billion of stock wherever the deal prices.

Stephen Wong, a Hong Kong-based investment manager at Park Capital Group, said he didn’t plan to subscribe to the IPO. He said he would rather invest in companies directly involved in technology and e-commerce rather than an infrastructure operator.

“JD Logistics’ capital-intensive business model carries high overhead costs, making it less attractive than other high-growth and asset-light technology startups,” he said.

JD Logistics competes with businesses such as Shenzhen-listed

S.F. Holding Co.,

ZTO Express Cayman Inc. and Alibaba’s logistics arm, Cainiao Network Technology Co. turned the unit into a stand-alone business in 2017, which then began taking external customers. Clients include the shoe maker

Skechers USA Inc.

At the end of 2020, JD Logistics had more than 900 warehouses, more than 190,000 delivery staff and over 190,000 corporate customers. accounted for nearly 54% of last year’s revenue.

Overall revenue at JD Logistics jumped 47% last year to 73.4 billion yuan, the equivalent of $11.4 billion, and it made adjusted profit of 1.71 billion yuan. The profit figure excludes accounting charges related to the valuation of convertible stock, and the costs of share-based compensation.

However, the company has been rapidly hiring and building out its logistics network, and won’t benefit from the same Covid-19-related support from the government that it received last year. It expects to report a significant adjusted loss this year.

JD Logistics is offering 609.16 million new shares at an indicative range of 39.36 to 43.36 Hong Kong dollars each, the company’s listing document said, the equivalent of $5.07 to $5.58. It plans to fix the offer price on Friday, and for the shares to start trading on May 28.

The offering size could increase by up to 15% if a so-called green-shoe option is exercised. The deal is being handled by units of

Bank of America Corp.


Goldman Sachs Group Inc.


Haitong Securities Co. owns about 79% of the logistics unit. In 2018 it sold about $2.5 billion of stock to external investors including

Tencent Holdings Ltd.

Beijing-based raised nearly $4.5 billion from a secondary listing in Hong Kong last June, while its

JD Health International Inc.

unit went public in December in an IPO valued at nearly $4 billion.’s Share Sales

More WSJ coverage of and its units, selected by the editors.

Write to Joanne Chiu at

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


The leader of a small hard-line party says he will try to form a unity government with Prime Minister Benjamin Netanyahu’s opponents. Sunday’s...


The woman who led the design of Bumble’s dating app in the run-up to the company’s February initial public offering is joining Twitter Inc.,...


Video platform Rumble said it is receiving an investment from a group of prominent conservative venture capitalists including Peter Thiel and “Hillbilly Elegy” author...


The Conservatives deleted a tweet on Thursday that leader Erin O’Toole has said was “detracting” from important conversations about the COVID-19 vaccine rollout...

Copyright © 2020 ZoxPress Theme. Theme by MVP Themes, powered by WordPress.