JD Logistics is the supply-chain arm of Chinese internet giant JD.com. (Photo by Greg Baker/AFP via Getty Images) After a blockbuster year for e-commerce boosted by the Covid-19 pandemic, China’s JD.com is seeking to raise up to $3.4 billion by listing its logistics arm.
JD Logistics is an integrated supply-chain player in China, offering services from warehousing to distribution, from manufacturer to end customer. Its initial public offering is set to be one of the largest in Hong Kong this year.
Shares in the e-commerce giant JD.com closed less than 1% lower in Hong Kong, while its Nasdaq-listed U.S. shares similarly fell less than 1%.
The back story. JD.com—one of China’s internet giants —established its in-house logistics division in 2007. The group built out warehousing and delivery infrastructure and supply-chain technologies through this division for a decade, before formally spinning out the company in 2017. Since then, JD Logistics has continued to serve JD.com, alongside offering services to external clients.
The company operated more than 900 warehouses across China by the end of 2020, with its logistics network using high-tech tools like self-driving vehicles and autonomous robots. Its 32 “smart mega warehouses” across China include a fully unmanned center in Shanghai.
Since being spun off in 2017, JD Logistics has grown quickly, with revenue growth of 32% between 2018 and 2019 and 47% from 2019 to 2020. It recorded net losses of more than 2 billion yuan ($300 million) in both 2018 and 2019, and a net loss of 4 billion yuan in 2020. The group expects its net loss for 2021 to “increase significantly” compared with 2020, in part due to lower profit margins from a decrease in government support related to the Covid-19 pandemic.
JD.com floated its pharmaceutical and health services division, JD Health, in Hong Kong in December 2020, raising $3.5 billion, and itself listed in Hong Kong in June 2020 after years of its shares being traded on the Nasdaq.
Also: China Cracked Down on Its internet Giants. The Rebound Will Be Slow.
What’s new. JD.com said on Monday that it would seek to raise up to 264,132 million Hong Kong dollars ($3.4 billion) through the listing of JD Logistics. The IPO would be the second-largest in Hong Kong in 2021, since Tencent-backed video-sharing app Kuaishou floated in February to raise $5.4 billion.
JD Logistics intends to issue 609.2 million shares—around 10% of its stock—within an expected price range of HK$39.36 to HK$43.36, according to filings. The company is slated to retain more than 64% of the total shares. An overallotment option, or green shoe, would allow for the sale of another 91 million shares to raise up to a further $510 million.
Cornerstone investors including Softbank’s Vision Fund, Tiger Global, Blackstone, and Temasek Holdings—Singapore’s state-backed investment company—have committed to buying around $1.5 billion worth of shares. The final pricing for the IPO is expected on Friday, before the shares begin trading on May 28. Bank of America , Goldman Sachs , and Chinese investment bank Haitong are the joint sponsors of the IPO.
In its prospectus, the group made the case that it was a tech-driven supply-chain and logistics expert, with proprietary tools allowing it to substantially improve the operational efficiencies of customers’ supply chains. The key risks to JD Logistics’ business, according to the filings, include intense competition in the e-commerce and services space, Chinese macroeconomic conditions, and the fact that a significant portion of its revenue has historically come from JD.com.
Plus: Chinese Retailer JD.com Beats Sales Estimates. The Online Boom May Be Here to Stay.
Looking ahead. Investors can view JD Logistics going public as a way to play a few familiar high-tech trends, including artificial intelligence and 5G-linked breakthroughs in autonomous vehicles and robots. These technologies have serious implications for supply chains. More broadly, JD Logistics would be another way to gain exposure to the e-commerce sector as consumer spending ramps up—in China and around the world—with the economic recovery from the Covid-19 pandemic.
But investors must be aware that the group would go public into a tough regulatory environment, with Chinese regulators cracking down on tech companies. Last month, regulators warned 13 groups, including a JD.com subsidiary, over antitrust issues, and share prices in the sector have faced headwinds since February amid rising interest rates and regulatory concerns in both the U.S. and China.
And the market has had recent cause for concern about the Chinese tech and logistics sector more broadly. One of JD Logistics’ competitors, SF Holding, saw its stock price crash more than 44% from highs in February after it posted a surprise quarterly loss. That prompted questions about lofty valuations beyond SF, which is China’s largest listed courier group. Expect JD Logistics to face similar scrutiny.

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform.