JD Logistics, the delivery arm of the Chinese ecommerce giant JD.com, saw its shares surge 18% on its debut after the company raised $3.1bn in its initial public offering (IPO) in Hong Kong. The company reached a stock market value of $34bn on Friday in the city’s second-largest listing this year.
The Beijing-based company priced its IPO at 40.36 Hong Kong dollars per share, the lower end of the range, as was predicted last week. Immediately after its debut, shares rose to HKD46.05. At the time of reporting, the price dropped back down to HKD41.70.
Despite listing share prices close to the lower end of the range – indicating that investors were cautious of the company’s market value – JD Logistics had to stop taking orders for its shares ahead of schedule last week because of high demand.
Its listing is closely watched as an indicator of appetite for big IPOs in Hong Kong of companies closely connected to China’s internet economy, which has been at the centre of an ongoing antitrust crackdown.
At a briefing in Beijing to mark the company’s listing, JD Logistics CEO Yu Rui said that the scrutiny by regulators would bring the business more opportunities as it was differentiating itself by focussing on its core values: “technology, efficient global streamlining and sustainable development.”
He also added that JD Logistics aims to use the funds raised in its IPO to further “improve our networks, including in the lower-tier and suburban areas in China, and the infrastructure of the overseas markets.”
While the company has boosted warehouse efficiency with robots and automation, the final delivery service depends heavily on more than 200,000 human couriers.
JD Logistics delivers 90 per cent of packages on the same or the next day for parent company JD.com. In recent years, the company has also provided logistics and delivery services to third-party customers.
Friday’s IPO was the second-largest listing in Hong Kong this year after Kuaishou Technology’s debut in January, which according to GlobalData’s deals database, raise HKD2bn.