JD Health dives on pet-care purchase

Shares of JD Health (6618) plunged 7.4 percent yesterday after announcing a US$355.4 million (HK$2.77 billion) purchase of an e-commerce business related to pet-care from its parent JD.com (9618).

The business includes the sale and distribution of products related to prescription drugs and diets, pet nutrition and deworming, pet milk powder, pet mouth, ear and eye cleaning, it said in a filing yesterday.

These products had generated 61.6 million yuan (HK$72.21 million) and 89.3 million yuan in pre-tax profit for JD in 2020 and 2021 respectively, and the healthcare unit intends to settle the transaction with its internal resources, the filing said.

The firm believes the acquisition will enable it: to further expand the product offering by partnering with a broader set of suppliers and third-party merchants transferred from JD; provide a one-stop solution for user's pet-healthcare needs, upgrading the experience of its customers; and generate stable and sustainable revenue growth.