China's JD Logistics expected to raise $3.2bn in Hong Kong IPO

JD Logistics is expected to raise $3.2bn via an initial public offering in Hong Kong IPO by selling 609.2m shares at a price of 40.36 Hong Kong dollars each.

Nevertheless, according to sources that spoke to CNBC on Friday, the logistics arm of the Chinese e-commerce giant still needs to confirm the pricing of the shares.

The parent company JD.com, which is already listed in the US, carried out a $3.87bn secondary listing in Hong Kong last June and already listed its health-care unit in Hong Kong in December.

The logistics arms focuses on same-day and next-day deliveries and investing in automated logistics warehouses.

In 2020, JD Logistics raked in revenues of $11.4bn, a 47% year-on-year rise. Nevertheless, over half of JD Logistics’ sales came from JD Group and other affiliated companies, a risk flagged by the company itself in its prospectus for the float.

“A significant portion of our revenue was associated with JD Group during the Track Record Period and we expect a significant portion of our revenue to continue to be associated with JD Group in the foreseeable future,” it said.

“We may have different development prospects or conflicts of interest with JD Group and, because of JD Group’s controlling ownership interest in our Company, may not be able to resolve such conflicts on favorable terms for us.”