JD.com debuts with 3.5 per cent gain in Hong Kong’s biggest initial public offering of 2020 as joyous investors embrace e-commerce
- Shares of the company, which were overbought by retail investors by 179 times, rose as much as 5.8 per cent in early trading, before settling the day at HK$234 each, a 3.5 per cent premium to its initial public offering (IPO) price
- Secondary listing of JD.com follows NetEase last week
JD.com marked its trading debut in Hong Kong with a 3.5 per cent gain, as its canine mascot gave China’s second-largest online retailer a virtual send-off by striking a digital version of the ceremonial gong.
Shares of the company, which were overbought by retail investors by 179 times, rose as much as 5.8 per cent in early trading, before settling the day at HK$234 each, a 3.5 per cent premium to its initial public offering (IPO) price.
The company raised HK$29.8 billion (US$3.8 billion) in capital from the secondary listing, and could boost it to HK$34.2 billion if an over-allotment option is fully exercised. It was Hong Kong’s largest fundraising this year so far – and the first to feature a dog, the corporate mascot, banging the virtual gong that has replaced live ceremonies due to the coronavirus.
“Six years ago, JD.com was successfully listed on Nasdaq in the US. Today, we come to Hong Kong as we firmly believe that Hong Kong and JD will both have a better future,” said Xu Lei, chief executive of JD Retail, in a recorded message broadcast during the virtual ceremony.
The Hong Kong-listed shares of JD.com are fully fungible with its American depositary receipts (ADR) traded on the Nasdaq stock exchange in New York at a ratio of one American depositary share to two ordinary shares in Hong Kong. The ADR rose 1.7 per cent to close at US$62.01 on Wednesday.
JD.com is part of a raft of US-traded Chinese companies seeking a secondary listing in Hong Kong, taking advantage of the relaxation of rules over dual-class shares by the local bourse operator two years ago.
Being listed in Hong Kong gives JD.com access to investors who are more familiar with the landscape of Chinese companies and their operations, Xu said in an interview following a ceremony held in Beijing.
“The core business segment and consumers of JD are based in mainland China, so we think investors in Asia are more familiar with our development and progress,” he said.
“When we were choosing the most suitable place for the secondary listing, Hong Kong naturally came into our mind, as it is one of the most free marketplaces in the world. The investors there are very mature and they fully understand the merits of mainland corporates.”
Additional reporting by Minghe Hu
