China's JD Logistics set to raise $3.2 billion in Hong Kong IPO
GUANGZHOU, China — The logistics arm of Chinese e-commerce giant JD.com is set to price its Hong Kong initial public offering at 40.36 Hong Kong dollars, near the bottom of the range, a person with knowledge of the matter told CNBC.
JD Logistics previously said its IPO on the Hong Kong Stock Exchange would be priced between 39.36 Hong Kong dollars and 43.36 Hong Kong dollars.
The company will issue 609.2 million shares. At 40.36 Hong Kong dollars each, the company would raise 24.6 billion Hong Kong dollars ($3.2 billion).
The pricing is subject to confirmation, said the person, who did not wish to be identified as they were not authorized to speak publicly.
JD declined to comment when contacted by CNBC.
JD.com, a rival to Alibaba in China, has been busy in the capital markets. JD.com, which is listed in the U.S., carried out a $3.87 billion secondary listing in Hong Kong last June. The company then listed its health-care unit in Hong Kong in December.
However, JD withdrew its planned listing of its financial technology arm, JD Technology, from the Nasdaq-style STAR market in Shanghai last month.
JD has been investing in its logistics as a way to differentiate in China’s cut-throat e-commerce market. The company has been focusing on same-day and next-day deliveries and investing in automated logistics warehouses.
In 2020, JD Logistics raked in revenue of 73.4 billion yuan ($11.4 billion), a 47% year-on-year rise. However, the company reported a 4 billion yuan loss in 2020, more than the 2.2 billion loss the year before.
Furthermore, in 2020, more than 50% of JD Logistics’ revenue came from JD Group and other affiliated companies — a risk the company flagged in its IPO prospectus.
“A significant portion of our revenue was associated with JD Group during the Track Record Period and we expect a significant portion of our revenue to continue to be associated with JD Group in the foreseeable future,” it said.
“We may have different development prospects or conflicts of interest with JD Group and, because of JD Group’s controlling ownership interest in our Company, may not be able to resolve such conflicts on favorable terms for us.”