JD Logistics Inc., the delivery arm of e-commerce giant JD.com Inc., is expected to raise around HKD 24.6 billion (US $ 3.2 billion) after slated to go public in Hong Kong near the bottom to evaluate a marketed area to people with knowledge of the matter.
The warehouse and shipping company has announced to potential investors that it plans to purchase 609.2 million shares at a price of HK $ 40.36 each. The respondents demanded not to be identified because the information is private.
The company will issue 609.2 million shares. For every $ 40.36 Hong Kong, the company would raise Hong Kong $ 24.6 billion ($ 3.2 billion). Pricing is in need of confirmation, said the person who refused to be identified because they did not have the authority to speak publicly.
JD has invested in its logistics to differentiate itself in the Chinese e-commerce market. The company has focused on same and next day deliveries and has invested in automated logistics warehouses.
In 2020, JD Logistics posted sales of 73.4 billion yuan ($ 11.4 billion), up 47% over the previous year. However, the company posted a loss of 4 billion yuan in 2020, up from 2.2 billion a year earlier.
Additionally, in 2020, more than 50% of JD Logistics’ sales came from JD Group and other affiliates – a risk the company identified in its IPO prospectus.
The JD Logistics networks were founded in 2007 and a decade later set up as a separate entity under JD.com. According to the brochure, they include so-called last-mile and long-haul lines as well as cold chain and bulky article networks. By the end of 2020, the company operated more than 900 warehouses across China. It is still loss-making, posting a net loss of 4.1 billion yuan ($ 637 million) last year.
JD Logistics shares are expected to start trading in Hong Kong on May 28th. BofA Securities Inc., Goldman Sachs Group Inc. and Haitong International Securities Group Ltd. are joint sponsors for the listing.