JD Industrials is redesigning its Hong Kong IPO plan to ride the Chinese stock wave

The industrial unit of e-commerce giant JD.com has filed for an initial public offering (IPO) in Hong Kong, in a bid to capitalize on the Chinese stock market frenzy brought on by heavy stimulus from Beijing and stronger financial results.

JD Industrials filed its second IPO application with the Hong Kong stock exchange on Monday, after an initial attempt last year failed due to tepid market conditions. The company did not disclose the size of the fundraising. It previously said it was looking to raise $1 billion from the IPO.

JD Industrials, the largest provider of industrial supply chain technology and services by gross merchandise value in China, is trying to ride the wave in Chinese stock markets caused by a stimulus package from Beijing last week. In addition to cuts in financing costs, authorities introduced a monetary easing package, including 800 billion yuan ($114 billion) in new financing facilities for stock purchases.

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Afterwards, the Hang Seng Index rose more than 20 percent from its most recent low in August, while combined turnover on the Shanghai and Shenzhen stock exchanges rose to a record high of 2.6 trillion yuan ($370.6 billion) on Monday. . than double China’s total foreign direct investment last year.

In the first six months of this year, JD Industrials said sales rose 19 percent from a year earlier to 8.6 billion yuan, while adjusted net profit grew 25 percent to 507 million yuan.

In March 2023, JD.com said it would spin off its real estate and industrial units and list them in Hong Kong. Around that time, a group of investors including Abu Dhabi sovereign wealth fund Mubadala, Abu Dhabi fund 42XFund, asset manager M&G, private equity firm BPEA EQT and Chinese venture capital firm HongShan put a total of $300 million into JD Industrials through a Series B investment . preferred stock financing.

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A total of 42 companies raised $7.14 billion through initial public offerings on the main board of the Hong Kong Stock Exchange in the first nine months of 2024, double the total from the year-earlier period, according to data from the London Stock ExchangeGroup.

The city’s stock exchange accepted 108 new applications for listing on the main board this year.

Funds from JD Industrials’ IPO will be used to enhance its industrial supply chain capabilities, expand its operations, make potential strategic investments or acquisitions, and generate corporate purposes and working capital, the company said in a stock exchange filing.

Merrill Lynch (Asia Pacific), Goldman Sachs (Asia), Haitong International Securities and UBS Hong Kong are the coordinators of the proposed IPO.

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