JD Logistics gains on debut after $3.2 billion HK IPO

Bloomberg

JD Logistics Inc rose as much as 18% on its first day of trading after raising $3.2 billion in Hong Kong’s second-largest initial public offering this year.
Shares of the delivery arm of Chinese e-commerce giant JD.com climbed to as high as HK$47.75 in Hong Kong, before giving up some of their gains. The stock had been priced at HK$40.36, the lower end of its offered range, fuelling concern that demand for new listings in the Asian financial center has cooled after the blockbuster coming-out party of Kuaishou Technology earlier this year. JD.com was little changed.
The listing will allow JD Logistics to expand its network of more than 900 warehouses into less-developed regions of China and new markets overseas, while adding to the $782 million it’s spent on technology between 2018 and 2020. The company joins internet giants from Alibaba Group Holding Ltd to Tencent Holdings Ltd and Meituan in boosting spending, as increased antitrust scrutiny from regulators in Beijing threatens their most lucrative businesses from e-commerce to fintech.
“Frankly speaking, the focus for next few years will still be growth,” CEO Yu Rui said in an interview. “We will focus on business expansion and revenue growth for the next several years. Our net margin will keep improving in the long-term.”
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.