JD Logistics Inc., the delivery arm of e-commerce giant JD.com Inc., is set to raise about HK$24.6 billion ($3.2 billion) after planning to price its Hong Kong initial public offering near the bottom of a marketed range, according to people with knowledge of the matter.
The warehousing and shipping company is telling prospective investors that it plans to price 609.2 million shares at HK$40.36 each, the people said. It had marketed the shares at HK$39.36 to HK$43.36 apiece.
The JD.com unit’s debut next week will test the waters for investor demand in Hong Kong’s IPO market, which has cooled because of concerns over rising inflation and weakness in global stocks.
It is the second-largest listing in the city this year, after short video company Kuaishou Technology’s $6.2 billion float in February.
While first-time share sales in the Asian financial hub have had their best start to the year on record, with $20.5 billion raised so far, according to data compiled by Bloomberg, investor appetite for new stock offerings has petered out recently, with the massive first-day pops seen at the beginning of the year all but gone.
For example, SF Real Estate Investment Trust fell 16.5% in its debut on the Hong Kong bourse Monday.
JD Logistics attracted seven cornerstone investors to its offering, who agreed to subscribe for about $1.53 billion of stock, including SoftBank Vision Fund, Temasek Holdings Pte, Blackstone Group Inc. and Tiger Global.
Created in 2007 and set up as a standalone unit under JD.com a decade later, JD Logistics’ networks include both so-called last mile and longer distance lines, as well as cold chain and bulky item networks, according to its prospectus.
It operated more than 900 warehouses across China as of the end of 2020. It is still loss-making, reporting a net loss of 4.1 billion yuan ($637 million) last year.
JD Logistics’ shares are due to start trading in Hong Kong on May 28. BofA Securities Inc., Goldman Sachs Group Inc. and Haitong International Securities Group Ltd. are joint sponsors for the listing.