Indonesian courier company J&T Express applies for Hong Kong IPO amid sluggish recovery of fundraising in the city

Jakarta-based J&T Express is said to be considering a share sale from US$500 million to US$1 billion as soon as this year, according to a Bloomberg report
The courier company’s proposed Hong Kong listing comes amid a sluggish recovery in the city’s IPO market

IPO

Tracy Quin Shanghai

Published: 4:40pm, 17 Jun 2023

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International courier company J&T Express, which led the Southeast Asian express delivery market last year, on Friday applied for an initial public offering (IPO) in Hong Kong, despite the current slow recovery for corporate fundraising in the city.

Jakarta-based J&T’s application did not specify the amount it wanted to raise, but a Bloomberg report on Friday that cited people familiar with matter said the firm was considering a share sale in the city from US$500 million to US$1 billion as soon as this year. No final decision has been made and details including size and timeline could still change, the report said.

The company, whose Chinese name Jitu means “speedy rabbit”, said in its filing that it has appointed Morgan Stanley Asia, Merrill Lynch (Asia-Pacific) and China International Capital Corp Hong Kong Securities as overall coordinators of its proposed Hong Kong IPO.

No offer or invitation will be made to the public in the city until after a prospectus of J&T has been registered with the Registrar of Companies in Hong Kong in accordance with the Companies Ordinance, according to the firm’s filing.

J&T Express delivery vans are seen operating in Vietnam, where the courier company has been in business since 2018. Photo: Handout

J&T’s proposed Hong Kong listing comes amid a sluggish recovery in the city’s IPO market, where a PwC forecast estimated that around 100 companies will go public this year.

Hong Kong saw 30 IPOs in the first six months of this year, up 11 per cent compared to the first half of 2022. But funds raised declined by 14 per cent to HK$17 billion compared with HK$19.7 billion in the first half of last year, according to PwC.

J&T was established in 2015 by entrepreneurs Tony Chen Mingyong, founder and chief executive of Chinese smartphone maker Oppo, and Jet Li Jie, who serves as chairman and chief executive of the courier company. Li previously served as chief executive of Oppo Indonesia.

Known for its low-cost service, J&T was the top express delivery operator last year in Southeast Asia, where it had a 22.5 per cent share of the market in terms of parcel volume, according to Frost & Sullivan. The firm handled 2.513 billion domestic parcels in 2022, compared with 1.153 billion in 2020.

J&T Express launched its operations across the United Arab Emirates and Saudi Arabia in January 2022. Photo: Handout

J&T, which entered mainland China’s logistics market in 2020, said its total revenue last year reached US$7.3 billion last year, up from US$4.9 billion in 2021.

China has become one the biggest markets for J&T since it acquired mainland rival Best’s courier business for 6.8 billion yuan in 2021, in response to a brutal price war among the logistics industry’s major players. J&T’s services on the mainland was once offered for under 1 yuan (15 US cents) per package in manufacturing hub Yiwu, a county-level city in eastern Zhejiang province.

J&T has been steadily expanding the reach of its international operations, establishing operations in a variety of countries including Brazil, Mexico, United Arab Emirates, Saudi Arabia and Egypt.

Alibaba Group Holding’s logistics arm Cainiao Network, which is estimated to be worth more than US$20 billion, is also expected to pursue a Hong Kong listing this year. Alibaba owns the South China Morning Post.

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