JD Logistics set to raise US$3.2 billion in Hong Kong IPO in city’s second-biggest fundraising so far this year
JD Logistics indicated on Friday it will price its Hong Kong initial public offering at HK$40.36, which will help the company raise HK$24.6 billion (US$3.2 billion) in the city’s second-biggest deal so far this year, according to a person familiar with the matter.
The final offer price is near the bottom end of the range marketed to investors of HK$39.36 to HK$43.36 per share.
JD Logistics plans to issue 609.2 million shares in its global offering, the bulk of which are slated for institutional investors. There is an overallotment option to sell up to 91.4 million more shares if there is strong enough demand. Listing on the Hong Kong stock exchange is scheduled for May 28.
Investors will be on tenterhooks ahead of JD Logistics’ debut after SF Real Estate Investment Trust, an investment vehicle owned by China’s largest courier provider, S.F Holding, dropped 16 per cent on its first day of trading.
The logistics unit of JD.com will raise US$3.2 billion, after indicating Hong Kong IPO offer price at HK$40.36 per share
The share sale by the logistics unit of the Chinese e-commerce giant JD.com comes as the rush of IPOs this year slows down.
Only four IPOs completed over the past six weeks, data from Refinitiv shows, in stark contrast to the busy month of January, when 15 IPOs completed. The Hang Seng Index rose past the 30,000-level in a 21-month high in January.
The bullish sentiment helped Chinese short-video platform Kuaishou Technology pull off a US$6.2 billion IPO, which ranks as the world’s biggest deal this year.
IPO funds raised in the first four months this year amounted to US$20.3 billion across 35 IPOs, a record high, according to Refinitiv.
JD Logistics is expected to issue 609.2 million shares in its global offering
JD Logistics’ operating loss for the first quarter widened to 1.5 billion yuan (US$233 million), from 421.4 million yuan during the same period a year ago, according to the latest first-quarter results of parent JD.com.
The Beijing-based firm said in its prospectus that it expects a bigger net loss for this year, after racking up losses of 2.8 billion yuan in 2018, 2.2 billion yuan in 2019 and 4 billion yuan in 2020.
“As we currently prioritise growth of our business and expansion of our market share over profitability, there can be significant fluctuations in our profitability profile in the near-to-medium term,” the company said in its prospectus.
The company plans to use proceeds from the IPO to expand its warehouse, logistics and delivery networks, and upgrade its technologies, including its data analytics and algorithm capabilities.
Formerly known as Jingdong Express Group, JD Logistics was created in April 2017 as a separate business unit under JD.com, using the company’s fulfilment network to provide integrated supply chain and logistics services to third-party companies.