China’s JD.com unit Jingdong Industrials aims for US$412 million Hong Kong IPO

Jingdong Industrials, the supply-chain technology arm of JD.com, aims to raise as much as HK$3.21 billion (US$412 million) through a Hong Kong stock offering, joining a wave of Chinese mainland companies tapping into the city’s buoyant capital market.\nThe company said it would offer 211.21 million shares priced between HK$12.70 and HK$15.50 in its primary offering, with the final offer price to be determined on December 10, according to a filing with the Hong Kong stock exchange on Wednesday.\nAbout 10 per cent of the H-share offering would be allocated to the public, with the remainder reserved for institutional investors, JD Industrials said. Retail investors can begin subscribing to shares on Wednesday, with the offer closing on December 8. Trading is expected to commence on December 11.\nJD Industrials said it planned to use 35 per cent of the net proceeds to enhance its industrial supply-chain capabilities over the next four to five years, while 25 per cent would go towards business expansion. The remainder would be used for acquisitions and working capital.\nThe deal has attracted seven cornerstone investors: London-based M&G Investments, CPE Investment, Anatole Investment, IvyRock Asset, CoreView Capital, Schonfeld Strategic Advisors and Burkehill Global Management. They have committed to subscribe for shares worth a total of US$170 million and agreed to hold them for at least six months after the listing.\nOperating as a stand-alone business unit of JD Group since 2017, JD Industrials offers a wide range of industrial products and digital supply-chain services in China. It has grown into the country’s largest maintenance, repair and operations procurement service provider by transaction value, which is nearly three times larger than its nearest competitor, according to consultancy CIC.\nJD.com will retain a 72 per cent stake after the listing. The company acknowledged in the filing that any negative development in its relationship with parent JD.com could “materially and adversely” affect its business and brand.\nBofA Securities, UBS, Haitong International and Goldman Sachs are joint sponsors of the deal.\nMore to follow ...\n