Ecommerce giant JD.com to spin off another company with logistics arm IPO in Hong Kong
JD.com, China’s second-biggest ecommerce group after Alibaba, is to launch its third public listing: JD Logistics has filed for a Hong Kong IPO.
China’s ecommerce giant JD.com is spinning off its logistics arm for an independent public listing in Hong Kong, potentially raising $5 billion for a $40 billion valuation. The company will be JD’s third publicly traded unit: The other two are JD Health and JD Group.
JD Logistics filed a prospectus for a Hong Kong IPO on Tuesday. Bank of America’s multinational investment arm BofA Securities, Goldman Sachs Group, and Haitong International Capital are co-sponsors of the public offering.
- JD’s online healthcare unit, JD Health, completed a $3.48 billion IPO in Hong Kong last December, boosting the company valuation to nearly $30 billion.
- Founded in 2004 by Richard Liu (刘强东 Liú Qiángdōng), JD.com went public on NASDAQ in 2014. Now the second-largest ecommerce platform in China after Alibaba, the company was relisted last June in Hong Kong, raising $3.87 billion.
- Liu resigned from five key executive positions last June, shortly ahead of JD’s Hong Kong relisting. Liu has been moving away from public eyes after he was accused of sexual assault and arrested in the U.S. in 2018.
JD Logistics bled money for more than a decade, but seems now close to breaking even, thanks to the pandemic ecommerce boom.
- The company boosted revenue by more than 43.2% and narrowed its net loss to 11.7 million yuan ($1.8 million) in the first three quarters of 2020. In the same period in 2019, JD Logistics lost 2.23 billion yuan ($345.3 million).
- Originally JD’s internal delivery department, JD Logistics became a stand-alone business in 2017 and began to work with external customers, which contributed two-fifths of its 49.5 billion yuan ($7.4 billion) total revenue in the first nine months of 2020.
- The company employs more than 240,000 people and operates more than 800 warehouses across the country, according to the IPO stock filing. In comparison, FedEx — which has a market capitalization of $68 billion — employs a total of 245,000 people across various services worldwide.
JD’s next and fourth IPO plan is for its fintech affiliate, JD Digits. This appears to be delayed. Beijing last year began stepping up regulation of big internet companies, especially those with fintech operations, and the suspension of Alibaba’s Ant Group IPO poured cold water on the industry.
- Originally named JD Finance and offering microlending services, JD Digits filed for an IPO in Shanghai’s NASDAQ-like STAR market last September.
- JD Digits was renamed this January to JD Tech, and integrated JD’s Cloud, artificial intelligence, and Internet of Things businesses, as the company seeks to brand itself as a technology company and continues to seek public listing.
