JD.com’s logistics arm aiming to raise over $3bn in Hong Kong IPO

JD.com’s logistics arm JD Logistics is planning on raising up to HK$26.4 billion (£2.3 billion) in its upcoming initial public offering (IPO) on the Hong Kong Stock Exchange.

The logistics company, plans to sell 10 per cent of its total shares (609 million shares).

The final share price will be set on Friday and the company expects to begin trading stock at the end of May.

The company has the option to exercise an-over allotment option which will enable it to sell up to 91 million more shares and raise up to a further £360 million.

JD Logistics has enjoyed a successful year as the pandemic has driven ecommerce sales up, seeing a rise in revenue of 64.1 per cent (£2.4 billion) in its first quarter of 2021 when compared to the same period in 2020.

However, the company announced its gross profit for the quarter peaked at 230.7 million yuan (£25.2 million), a decline of 72.7 per cent from last year, which the company said the pandemic was responsible for alongside an increase in its workforce.

READ MORE: JD.com to start paying staff in ‘digital yuan’ as China storms ahead with state-backed crypto rollout

Analysts are reportedly using the IPO as a gauge for investor interest in major shares as indications of global inflation are beginning to emerge.

The logistics company said it would spend 55 per cent of the raised funds upgrading its logistics network in the next 3 years, it also stated that 20 per cent would go towards developing technology.

The news comes just as rival ecommerce site Alibaba announced it was investing $400 million in the retail arm of Vietnamese conglomerate Masan Group Corp, according to Reuters.

The deal will expand Alibaba’s presence in Southeast Asia after its $4 billion investment in Singapore based ecommerce company Lazada in 2018.

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