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JD Logistics, the delivery unit of Chinese e-commerce group JD.com, will try to raise up to $ 3.4 million in what would be one of Hong Kong’s largest initial public offerings this year.
The company’s decision to list comes after a boom in online shopping during the coronavirus pandemic. But a tougher regulatory environment for Chinese technology groups and the recent fall in shares of SF Holding, one of JD Logistics’ biggest competitors, brought down about a quarter of the stock market price proposed by the company, according to a person close to the company. agreement.
JD Logistics will sell shares of 609.2 million at HK 39.36-HK $ 43.36 ($ 5.07 -5.58 $) each. The final price will be set on Friday and the shares are expected to start trading on May 28, according to the terms of the deal seen by the Financial Times.
The IPO would be the second largest in the city this year later Kuaishou, a Chinese viral video app, grossed $ 5.4 billion in February and would be JD.com’s third blockbuster in Hong Kong last year. JD Health, which sells pharmaceutical and healthcare services online, completed one $ 4 billion IPO in December and JD.com conducted its own secondary listing in the territory last June, which collected a similar amount.
Hong Kong has benefited from a flood of high-profile listings by Chinese technology companies in recent months and has hosted more than $ 20 billion in stock this year, according to Bloomberg data.
JD.com created its logistics and delivery industry in 2007 and turned it into an independent unit a decade later. The company operates more than 900 warehouses in China and provides delivery and storage services to third parties.
But the group is among those under pressure as China increases the scrutiny of its larger Internet groups. Last month, officials told 13 of the nation’s largest technology companies, including the fintech subsidiaries of JD.com, Tencent and ByteDance, that “Rectify outstanding issues” on their platforms. The push was seen as a sign that the industry’s regulatory approach extended beyond Jack Ma’s group of ants, after last November’s $ 37 billion fintech IPO was damaged. .
Separately, shares of SF Holding, China’s largest listed delivery company, fell sharply last month after a quarterly loss that caused investors and sparked control over the high valuations of Chinese companies. .
“Competition in China’s logistics space is fierce, especially after [Indonesian company] J&T Express entered the market, which has had an impact on the performance of other logistics companies and will reach JD, ”said Li Chengdong of Haitun, an e-commerce think tank.
JD Logistics was initially the distribution group of the e-commerce site JD.com, but a growing part of its business comes from transporting packages on behalf of third parties.
Corner investors in JD Logistics’ IPO, including Vision Fund SoftBank technology group Temasek Holdings, Singapore’s state-backed investment company and investment firms Tiger Global and Blackstone, have subscribed to $ 1.5 billion in shares, according to the terms of the agreement.
Bank of America, Goldman Sachs and Haitong International are the joint sponsors of the list.
Additional reports from Ryan McMorrow in Beijing
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