JD Logistics seeks up to US$1.1 billion in first new share placement since Hong Kong listing

JD Logistics is raising US$400 million through new share placement to investors at up to 12 per cent discount to closing price
Parent JD.com intends to buy another US$700 million worth of its new shares, but deal is pending shareholders’ approval

Banking & finance

Georgina Lee

Published: 9:30pm, 24 Mar 2022

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JD Logistics has launched its first follow-on share sale in just 10 months after its May 2021 listing on the Hong Kong stock exchange, aiming to raise about US$400 million through new share placement to investors.

The company, 63.5 per cent owned by e-commerce giant JD.com, is offering the shares at HK$20.3 to HK$21.15 per share, representing a discount of between 8 per cent and 11.7 per cent to their Thursday closing price of HK$23, according to a term sheet seen by South China Morning Post.

JD.com may buy US$700 million of JD Logistics’ new shares at the final offer price through a wholly-owned subsidiary, according to a statement to the Hong Kong stock exchange that did not name the unit, adding that the two proposals are subject to market conditions and are “not inter-conditional.” Bank of America and Goldman Sachs are the joint bookrunners of the deal.

JD.com controls JD Logistics through the wholly owned Jingdong Tech Group. If both the placements and subscription by JD.com push through as planned, JD Logistics could raise up to US$1.1 billion, using the net proceeds to improve its network and solution, as well as increasing its cash reserve.

A view of JD’s CTU (container transport unit) robot zone for order pickups at JD’s Beijing Asia No. 1, one of the 38 Asia No. 1 intelligent logistics parks nationwide, in Beijing on November 9, 2021, ahead of the Singles’s Day online shopping festival. Photo: Simon Song

JD Logistics raised HK$24.1 billion (US$3.1 billion) during its initial public offering last year, as strong demand by retail investors overbought the stock offer’s retail tranche by a staggering 715.6 times.

The company’s 2021 net loss nearly quadrupled to 15.7 billion yuan (US$2.5 billion), from 4 billion yuan in 2020. In its IPO prospectus, JD Logistics had warned investors to expect its loss to widen in 2021.

Since its listing in May, its share price has plunged 51 per cent from the June peak of HK$47.

“As an integrated supply chain logistic services player, I don’t think we have direct competitors in (China),” JD Logistics’ chief executive Yu Rui said during the company’s trading debut in Hong Kong.

China is the world’s largest logistics market based on total logistics spending of 14.9 trillion yuan in 2020. The market is forecast to reach 19.3 trillion yuan by 2025, the company said, citing industry researcher China Insights Consultancy.

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