JD Logistics, the logistics subsidiary of JD.com Inc, has launched an IPO in Hong Kong with the goal of raising up to $3.4 billion. The company has set a price range of HK$39.36 to HK$43.36 per share. The offering will consist of 609.1 million shares, amounting to 10% of the company’s total shares. There is also an option to sell an additional 91 million shares through an over-allotment option, which could raise an extra $510 million.

This IPO is expected to be one of the largest listings in Hong Kong this year, following the successful $5.4 billion IPO of Kuaishou Technology in January. It is seen as a crucial test of investor interest in major share sales, given the recent instability in global equity markets driven by concerns over inflation.

At the higher end of the price range, JD Logistics would have a valuation of $34 billion. The IPO has attracted significant attention from investors, with seven prominent cornerstone shareholders, including SoftBank Group Corp’s Vision Fund and Temasek, committing to purchasing shares worth up to $1.53 billion, accounting for 45% of the offering.

The final price for the IPO will be determined on Friday, and the stock will start trading on the Hong Kong Stock Exchange on May 28. JD.com separated its logistics arm into a separate entity in 2017 and subsequently opened its delivery and warehousing services to third-party companies. The idea of an IPO for JD Logistics had been under consideration for almost a year. In June 2020, JD.com executed a secondary listing in Hong Kong, raising $3.87 billion.

Through this IPO, JD Logistics aims to capitalize on the increasing demand for logistics and delivery services, particularly in the e-commerce sector. The funds raised will be used to expand and improve the company’s logistics network, invest in technology and innovation, and support overall growth.

Overall, JD Logistics’ IPO in Hong Kong is expected to be a significant event, demonstrating the company’s strength and investor confidence in its business model. As the company plays a vital role in enabling smooth and efficient logistics solutions, it will be interesting to observe its performance in the public markets.

Useful links:
1. JD.com: Official website of JD.com.
2. Hong Kong Stock Exchange: Official website of the Hong Kong Stock Exchange.