JD Logistics

JD Logistics Inc, the logistics arm under e-commerce giant JD.com, announced on Monday that it would start taking orders for an IPO in the Hong Kong stock exchange that it hopes will raise up to HK$26.41 billion ($3.4 billion). 

JD Logistics could become the second-largest IPO in Hong Kong this year, after short video platform Kuaishou's $6.2 billion IPO in February, according to media reports, in a fresh boost for the financial hub's stock market which has been lifted by an influx of mainland IPOs. 

The company is selling 609.2 million shares at HK$39.36 to HK$43.46 each, according to the global offering prospectus of JD Logistics posted on its website.

It is conducive to making JD Logistics bigger and stronger with the help of capital, reducing its dependence on the JD.com e-commerce platform, and thus growing into a real logistics giant, Wang Peng, assistant professor of the Gaoling School of Artificial Intelligence at Renmin University of China, told the Global Times on Monday.

JD Logistics was established in 2007, and it operates up to 900 warehouses nationwide. But with only a 2.7-percent market share, the company also faces fierce competition in the Chinese market. 

It lost 4.1 billion yuan ($636.6 million) in 2020 and 2.2 billion yuan in 2019. However, its revenue increased 47 percent in 2020 to 73.4 billion yuan, said the prospectus.

According to the prospectus, JD Logistics has attracted seven institutional investors to its global offering with about $1.53 billion worth of shares, including SoftBank's Vision Fund, Temasek Holdings and Blackstone Group Inc.

"JD Logistics is a solid moat for JD.com. The logistics arm has in total transported more than 5,000 tons of goods. Its logistics network covers 100 percent of the districts and counties in the Chinese mainland, with more than 200,000 employees," Zhang Xiaorong, director of the Cutting-Edge Technology Research Institute, told the Global Times on Monday.