Ecommerce giant to spin off another company with logistics arm IPO in Hong Kong

Business & Technology, China’s second-biggest ecommerce group after Alibaba, is to launch its third public listing: JD Logistics has filed for a Hong Kong IPO.

Last mile delivery from JD Logistics. Oriental Image/Hou Jianxun via Reuters

China’s ecommerce giant is spinning off its logistics arm for an independent public listing in Hong Kong, potentially raising $5 billion for a $40 billion valuation. The company will be JD’s third publicly traded unit: The other two are JD Health and JD Group.  

JD Logistics filed a prospectus for a Hong Kong IPO on Tuesday. Bank of America’s multinational investment arm BofA Securities, Goldman Sachs Group, and Haitong International Capital are co-sponsors of the public offering. 

JD Logistics bled money for more than a decade, but seems now close to breaking even, thanks to the pandemic ecommerce boom. 

  • The company boosted revenue by more than 43.2% and narrowed its net loss to 11.7 million yuan ($1.8 million) in the first three quarters of 2020. In the same period in 2019, JD Logistics lost 2.23 billion yuan ($345.3 million). 
  • Originally JD’s internal delivery department, JD Logistics became a stand-alone business in 2017 and began to work with external customers, which contributed two-fifths of its 49.5 billion yuan ($7.4 billion) total revenue in the first nine months of 2020. 
  • The company employs more than 240,000 people and operates more than 800 warehouses across the country, according to the IPO stock filing. In comparison, FedEx — which has a market capitalization of $68 billion — employs a total of 245,000 people across various services worldwide. 

JD’s next and fourth IPO plan is for its fintech affiliate, JD Digits. This appears to be delayed. Beijing last year began stepping up regulation of big internet companies, especially those with fintech operations, and the suspension of Alibaba’s Ant Group IPO poured cold water on the industry.  

  • Originally named JD Finance and offering microlending services, JD Digits filed for an IPO in Shanghai’s NASDAQ-like STAR market last September. 
  • JD Digits was renamed this January to JD Tech, and integrated JD’s Cloud, artificial intelligence, and Internet of Things businesses, as the company seeks to brand itself as a technology company and continues to seek public listing.