JD Logistics aims for $3b Hong Kong IPO next year

jd.com autonomous vehicle
JD expects to have more than 100,000 automated delivery robots on the road within five years, making them a key part of its logistics infrastructure.
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JD Logistics, a subsidiary of China’s second-largest e-commerce platform, JD.com, is looking to launch a USD 3.0 billion Hong Kong initial public offering (IPO).

The logistics company has invited proposals for the IPO from investment banks, according to Reuters citing unnamed sources, in what will likely be one of the largest equity offerings in 2021. JD Logistics was spun off as a standalone subsidiary of JD.com in 2017.

The move also follows the Beijing-based JD.com’s USD 4.4 billion secondary listing in Hong Kong in June, and JD Health’s USD 3.5 billion IPO launched last week. The offering was sponsored by UBS, Bank of America, and Haitong Securities.

As the key logistics arm of its e-commerce parent, JD Logistics competes in the space with Cainiao, the logistics arm of China’s largest e-commerce platform, Alibaba. The recent Singles’ Day online shopping festival – the world’s largest online shopping extravaganza, dwarfing Amazon’s Black Friday and Cyber Monday – tested JD Logistics’ capabilities in record online purchasing topping CNY 271.5 billion (USD 41.4 billion) between 1-11 November on JD.com.

JD Logistics operates more than 800 warehouses in China, with a total gross floor area of nearly 20 million sqm as of 30 September.

JD.com has seen the revenue contribution of logistics and other services increasingly grow from 1.4 per cent in 2017, to 4.1 per cent last year, with a unit revenue of CNY 23.5 billion. In its last reporting period logistics and other services were up 73 per cent to CNY 10.4 billion – representing 6.0 per cent of the group’s revenue – in the third quarter.

JD.com has aggressively ramped up its focus on technology with autonomous vehicles, drones and in 2017, it opened a fully automated warehouse in Shanghai that requires just four workers, but ships 200,000 packages a day. Raising the automation bar again, it set up the world’s first Level 4 autonomous vehicle network and recently announced it would have a network of 100 Level 4 delivery vehicles operating in Changshu by the end of the year.

The self-driving vehicle first hit the road in Wuhan in February at the height of the city’s Covid-19 lockdown, to help facilitate contactless delivery to hospitals and residences. That autonomous vehicle logged nearly 6,400 km and delivered more than 13,000 packages in a 107-day deployment, with the company saying the technology is now ready to be scaled.

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