JD Logistics launches HK IPO to raise up to US$3.4b

Hong Kong

JD Logistics will price its shares between HK$39.36 and HK$43.36 each as the company aims to raise up to US$3.4 billion, according to the company's filings, in one of Hong Kong's largest share sales in 2021.

The logistics offshoot of JD.com will sell 609.1 million shares in the deal which is 10 per cent of the company's total shares, the filings said.

An over-allotment option, or so-called greenshoe, exists to sell a further 91 million shares that would raise up to a further US$510 million. At that size, JD Logistics will be one of the biggest deals in Hong Kong this year following the Kuaishou Technology initial public offering (IPO) in late January which raised US$5.4 billion.

The company recorded 22.4 billion yuan (S$4.6 billion) in revenue in the first quarter of 2021, up 64.1 per cent from the same period in 2020. Its gross profit for the quarter reached 230.7 million yuan, down 72.7 per cent from the same time last year.

In its prospectus, JD Logistics said it expected an insignificant impact on its business from the Chinese government's tighter anti-monopoly regulations of Internet platform businesses.

The company, it said, controls 2.7 per cent of the integrated supply chain logistics market.

JD Logistics' IPO is expected by analysts to be a barometer of investor appetite towards major share sales following volatility in global equities markets over the past week, led by concerns inflation is starting to emerge around the world.

JD Logistics will be valued at US$34 billion at the top of the price range and seven high profile cornerstone shareholders led by SoftBank Group Corp's Vision Fund and Temasek have taken shares worth up to US$1.53 billion, or 45 per cent of the IPO, according to the filings.

The final price will be set on Friday and the stock will start trading on the Hong Kong Stock Exchange on May 28. REUTERS