JD Logistics to raise $4.2b in Hong Kong IPO: Sources

JD Logistics is due to debut on the Hong Kong Stock Exchange on May 28. PHOTO: REUTERS

HONG KONG (REUTERS) - JD Logistics has indicated it will price its shares at HK$40.36, towards the lower end of its flagged range, to raise US$3.16 billion (S$4.21 billion) in a Hong Kong initial public offering (IPO), two people with direct knowledge of the matter said.

The people declined to be identified as the information has not yet been made public.

JD Logistics, spun off from e-commerce major JD.com, did not immediately reply to a request for comment.

It had set a price range of HK$39.36 to HK$43.36 per share, which would have raised US$3.4 billion at the top end.

Pricing of the deal has been closely watched as a barometer of whether Hong Kong's red-hot IPO market has been impacted by the recent global markets volatility that has emerged on the prospect of accelerating inflation in the world's economies.

JD Logistics sold 609.1 million shares in a deal that would be Hong Kong's second-largest IPO this year following Kuaishou Technology raising US$5.4 billion in January. Kuaishou priced its shares at the peak of its range and another JD.com spin off, JD Health International, was also at the top when it listed last December.

JD Logistics sold 10 per cent of its total shares in the transaction which, at the bottom of the price range, would value the company at US$31.6 billion. That would be below the target of US$34 billion had the shares priced at the top of the range.

An over-allotment option, or so-called greenshoe, exists to sell a further 91 million shares within 30 days of the shares starting trade.

JD Logistics is due to debut on the Hong Kong Stock Exchange on May 28.

JD.com spun off its logistics unit into a standalone entity in 2017 and then opened up its delivery and warehousing services to third-party companies. The logistics company recorded 22.4 billion yuan (S$4.6 billion) in revenue in the first quarter of 2021, up 64.1 per cent from the same period in 2020.

Its gross profit for the quarter reached 230.7 million yuan, down 72.7 per cent from the same time last year, which it blamed on the impact of the novel coronavirus pandemic as well as adding 60,000 workers to its headcount during the year.

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