JD Logistics is set to raise $3.4 billion in a Hong Kong listing that will see it float 10 per cent of its shares.

The logistics company will sell 609.1 million shares at a price between HK$39.36 and HK$43.36, in a deal expected to be one of Hong Kong’s largest for the year.

JD Logistics parent company JD.com is one of China’s largest e-commerce companies, a direct competitor of fellow B2C giant Alibaba, and it posted revenues of over $114.3 billion for the 2020 financial year.

JD Logistics was founded in 2007 to build JD.com’s transportation and logistics network and was spun out as a separate company in 2017.

Since the spin-off, JD Logistics has been pursuing a strategy of providing its services to 3rd parties other than JD.com, and this accounted for 43.4 per cent of its revenue in the nine months ending September 2020.

The company’s business model relies heavily on same day delivery; it claims 90 per cent of its total orders were delivered on the same or next day in 2020.

JD Logistics said it controls 2.7 per cent of the global integrated supply chain logistics market.

JD.com still retains a 79 per cent stake in the former subsidiary.
The news comes after JD Logistics recorded revenues of 22.4 billion yuan in the first quarter of 2021, a 64.1 per cent year-on-year increase.

The company has said it feels it is largely unaffected by the Chinese government’s anti-monopoly crackdown currently impacting companies like Tencent and Ant Group.

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