JD Health has a great IPO in Hong Kong
A healthcare spin-off from China’s second-biggest ecommerce company did well in its first day of trading.
JD Health is an online pharmacy, medical appointment booking platform, and provider of telemedicine and other healthcare services. It was spun off from JD.com, China’s second-biggest ecommerce company after Alibaba.
JD Health had a popping IPO on the Hong Kong Stock Exchange today: Its shares were priced at $9.11 and ended the day trading at $14.19, making it Hong Kong’s “biggest share market debut of 2020.”
- JD Health will remain a subsidiary of JD.com, which retains a majority stake.
- JD.com also plans to list another two subsidiaries, probably next year: fintech company JD Digits, and JD Logistics, which provides warehousing and delivery services for JD.com itself and third-party companies.
JD Health was the largest online healthcare platform by revenue in China in 2019, “with a market share of 29.8% [and] a total revenue of 10.8 billion yuan” ($1.65 billion), according to research quoted in the company’s IPO prospectus.
- More than 80% of the revenues are from the sale of healthcare and pharmaceutical products. Most of this was from non-pharmaceutical products.
- Over-the-counter drugs accounted for the majority of the revenue from sales of pharmaceutical products.
The company hopes to grow telemedicine into a major revenue source, and already offers a number of consulting services.
- JD Health says it was “the first company in China to offer online appointments for COVID-19 nucleic acid testing service.”
- As elsewhere, the pandemic is expected to give telemedicine a boost in China.
- In August this year, JD Health launched an online primary healthcare channel, with a target of providing a “family doctor” to 50 million Chinese families in a country where people typically visit hospitals rather than general practitioners.
- The central and local governments will also be customers, according to the company’s prospectus, which promises to monetize their “unique value in areas such as primary healthcare, resident health records and medical insurance payment.”
The IPO was a boost for Hong Kong: “The strong performance of the IPO looks like a real shot in the arm for weak sentiment after the Ant IPO hangover,” said one analyst cited by Caixin.
