JD Logistics seeks up to S$4.54b in Hong Kong IPO

[HONG KONG] JD Logistics Inc, the delivery arm of e-commerce giant JD.com Inc, is seeking to raise as much as HK$26.4 billion (S$4.54 billion) in its Hong Kong initial public offering, seizing on China's online shopping boom sparked by the coronavirus pandemic.

The warehousing and shipping company is selling 609.2 million shares at HK$39.36 to HK$43.36 each, according to statement published in the South China Morning Post. The company will start taking investor orders from Monday and is set to begin trading on May 28 in Hong Kong. The deal is expected to be priced on May 21, according to the terms of the IPO obtained by Bloomberg News.

At US$3.4 billion, JD Logistics would be the second-largest IPO in the city this year, after Kuaishou Technology's US$6.2 billion listing in February. Hong Kong has seen two other blockbuster JD.com-related offerings in the past 12 months, including online health-care unit JD Health International Inc's $4 billion IPO in December, as well as its own second listing in June, which raised US$4.6 billion.

JD Logistics' first-time share sale comes as Hong Kong's market shrugs off concerns over inflation. The city has hosted US$20.5 billion worth of IPOs so far this year, nearly seven times the US$3 billion raised in the same period in 2020, data compiled by Bloomberg show.

Created in 2007 and set up as a standalone unit under JD.com a decade later, JD Logistics' networks include both so-called last mile and longer distance lines, as well as cold chain and bulky item networks, according to its prospectus. It operated more than 900 warehouses across China as of the end of 2020.

The logistics firm's revenue climbed 47 per cent in 2020 to 73.4 billion yuan (S$15.22 billion), the prospectus shows. The company reported a net loss of 4.1 billion yuan last year, compared to 2.2 billion yuan in 2019. It plans to use the proceeds from the IPO to upgrade and expand its logistics networks, develop advanced technologies and to expand its customer base.

JD Logistics has attracted seven cornerstone investors to its offering, who agreed to subscribe for about US$1.53 billion of stock, according to the terms.

The cornerstone investors are: SoftBank Vision Fund US$600 million, Temasek Holdings Pte about US$220 million, Blackstone Group Inc US$150 million Tiger Global US$200 million, China Chengtong Holdings Group Ltd US$160 million, Matthews Asia US$100 million, Oaktree Capital US$100 million. BofA Securities Inc, Goldman Sachs Group Inc and Haitong International Securities Group Ltd are joint sponsors for the listing.

BLOOMBERG