JD.com’s logistics unit set to sell shares through Hong Kong IPO

JD Logistics’ application comes more than two months after JD Health raised US$3.5 billion in its maiden share offering in Hong Kong in December

JD.com will continue to indirectly hold more than 50 per cent of the stock in JD Logistics

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A JD.com distribution centre in Beijing. Logistics and other services have steadily accounted for a larger portion of JD.com’s revenue. Photo: AFP

Published: 11:06pm, 16 Feb 2021Updated: 12:30am, 17 Feb 2021

The logistics unit of Chinese e-commerce giant JD.com is set to sell its shares through an initial public offering (IPO) at the Hong Kong stock exchange.

JD Logistics’ application to the local bourse on Tuesday came more than two months after JD Health raised US$3.5 billion in its maiden share offering in December. Its Beijing-based parent raised US$4.5 billion in a secondary listing in Hong Kong in June. The flotation was the city’s biggest fundraising event last year.

“(JD.com) intends to spin off JD Logistics by way of a separate listing of the JD Logistics shares on the main board of the Hong Kong stock exchange. The company submitted a spin-off proposal to the Hong Kong stock exchange … [the] exchange has confirmed that the company may proceed with the proposed spin off,” JD.com said in a filing late on Tuesday.

Once the spin off is complete, JD.com “will continue to indirectly hold more than 50 per cent of the shareholdings in JD Logistics and, therefore, JD Logistics will remain a subsidiary of the company”. It currently owns 79.12 per cent of JD Logistics.

The market appeared to be cheering the news on Tuesday. JD.com’s shares were trading higher on the Nasdaq in New York.

Several banks have submitted proposals to help the logistics company raise capital in what is likely to be one of the largest equity sales this year, as reported by the Post in December.

JD Logistics’ value to the e-commerce firm was highlighted during Singles’ Day, the world’s largest shopping extravaganza, held between November 1 and 11 last year, when shoppers shelled out a record 271.5 billion yuan (US$42 billion) on JD.com. JD Logistics competes with Cainiao, the logistics unit of this newspaper’s owner, Alibaba Group Holding.

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