Shares of bounce after $ 3.1 billion Hong Kong IPO

Shares in China’s e-commerce supply chain rose 14 percent for the first time since the company raised $ 3.1 billion in one of Hong Kong’s largest shares this year.

JD Logistics is a spin-off similar to the logistics arm of US technology group Amazon. The company delivers 90% of the packages to parent company’s on the same day or the next day, but it focuses more on delivery and logistics services to third party customers.

The initial public offering came from the Chinese government The steps are controlled the technological sector of the country. The market capitalization of Beijing-based JD Logistics reached about $ 36 billion after trading in Hong Kong on Friday.

Although the unit was gaining a boom in online shopping during the Covid-19 epidemic, its IPO was lower than expected when the company first introduced its listing materials a few months ago.

“The capital markets were hot at the time,” YU Yu, CEO of JD Logistics, told FT. “For JD Logistics, our IPO is just a matter of time, not an end in itself. ,, if: [price] is in a reasonable range, I think it is good. “

Analysts say the decline is due to a drop in the share price of rival SF Holdings աճ an increase in losses in JD Logistics, as it invests heavily in infrastructure.

The group has added about 200 warehouses in the last six months. Its operating loss in the first quarter rose to 1.5 billion rubles ($ 235.3 million) as revenue grew 64 percent year on year to 22.4 billion rubles.

“In the final bulletin, they said they were going to lose a lot of money in 2021, so ratings dropped,” said a Hong Kong-based analyst.

The IPO is also the second largest spin for, whose healthcare fund raised $ 3.5 billion at the Hong Kong IPO. in December, ‘s fintech pulled off its IPO at the Shanghai Star Market amid regulatory action last month.

JD Logistics CEO Yu Yoon says he is confident the company’s foreign business will continue to grow rapidly © Ryan McMorrow

Last year, JD Logistics earned about half of its revenue from its parent ferry packages. But some businesses targeting foreign customers are growing faster, with triple-digit growth in the first quarter.

Outsourcing JD Logistics “was our thesis when we decided to invest in 2018,” said Colin Guo, a partner at Sequoia Capital China. “If they only provided JD with their own logistics, their growth rate would be linked to JD, so investors և management aimed to attract more customers from abroad.”

The company had 190,000 external corporate clients as of December.

JD Logistics is one of our leading third-party logistics vendors. They are cost effective. There are many types of logistics in China, ”said Anderson Peng, Vice President of Skechers China.

Yoon said another way for JD Logistics to grow is the so-called livestreaming e-commerce of video apps like ByteDance’s Douyin, TikTok’s Chinese version և Kuaishou, as well as retailers selling products on Tencent’s WeChat platform. “We can provide services to everyone,” he said.

JD Logistics’ 190,000 shippers also began shipping parcels to individuals. Shipping 1kg of an apple bag from Pakin to Shanghai costs about Rmb16, says a 28-year-old courier named Young. “More and more people know about our courier services, they have started using us,” he added.

Although analysts at the Bernstein Research Group estimated that JD Logistics’ courier service accounted for 14 percent of revenue last year, they noted that China’s logistics industry was highly competitive, with prices falling by about 10 percent a year over the past decade.

They added that the low cost of JD Logistics ավար marketing costs will boost profitability in the near future.

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