JD Logistics to raise US$5b in HK

JD Logistics Inc’s initial public offering could raise at least US$5 billion and value the unit at about US$40 billion, people familiar with the matter have said. Details of the proposed spinoff haven’t been finalized, the company said in an IPO prospectus filed to the stock exchange.

JD.com’s shares gained more than 5 prcent Wednesday.

JD Logistics’s imminent IPO would be a milestone for its parent, which spent years building one of China’s largest courier services to ensure on-time delivery and retain control over its shipping network. That inhouse operation, which spanned more than 800 warehouses across the country as of September 30., has been credited for speeding JD.com’s recovery from early coronavirus disruptions.

“The spin-off and separate listing will help JD.com crystallize the value of its logistics arm, which it had invested in heavily for more than a decade,” Bloomberg Intelligence analyst Vey-Sern Ling said. “The funds raised can aid JD Logistics’s expansion without burdening JD.com. Going forward investors and management can focus on two distinct businesses, e-commerce and logistics, which have different growth and profitability profiles.”

JD Logistics’s net loss narrowed to 11.7 million yuan (US$1.8 million) in the nine months ended September from more than 80 times that a year earlier. Revenue grew by 43.2 percent to 49.5 billion yuan, according to its filing.

BofA Securities Inc., Goldman Sachs Group Inc. and Haitong International Capital are the joint sponsors of the proposed IPO, according to the prospectus.

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