JD.com to spin off logistics arm for US$4b

Finance | Reuters and Avery Chen 3 Feb 2021

JD.com's (9618) logistics unit will file for its Hong Kong initial public offering as soon as this month, aiming to raise US$4 billion (HK$31.2 billion), IFR reported.

The spinoff, JD Logistics, is targeting a valuation of US$40 billion, the report said. The company plans to start trading in the second quarter.

The offshoot of Chinese e-commerce giant JD.com would be the second subsidiary of the parent company to be spun off and listed in Hong Kong, following JD Health International (6618), which completed a HK$31 billion IPO last month.

JD.com is also planning to spin off JD Digits, the company's fintech arm, in Shanghai Star Market to raise around 20 billion yuan (HK$24.01 billion).

UBS, Bank of America and Haitong Securities will be the sponsors for JD Logistics' IPO. UBS and BofA also sponsored JD.com's HK$34.5 billion secondary listing in June, the largest listing in Hong Kong in 2020.

In 2018, the division raised US$2.5 billion in a funding round from investors including Hillhouse Capital Group, Sequoia Capital China, China Merchants Group, Tencent (0700), and China Life Insurance (2628). The deal valued JD Logistics at US$13.5 billion.

Separately, telecom connectivity products distributor Pangaea Connectivity Technology attracted at least HK$299 million in retail orders through margin financing as of last night, equivalent to an oversubscription of 19.6 times.

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