JD Logistics shares deliver in Hong Kong debut
Shares in the logistics arm of Chinese online retail giant JD.Com have jumped on their Hong Kong market debut.
JD Logistics raised $3.2bn (£2.3bn) in the Asian financial centre’s second-largest initial public offering (IPO) this year.
The company has a huge delivery network across mainland China and is known for its army of red-jacketed workers.
Despite its size, JD Logistics has still not reported an annual profit since it started in 2007.
JD Logistics shares rose as much as 14% in early trade before losing about half of that gain later in the day.
Some investors had voiced caution due to Beijing’s recent crackdown on some of China’s biggest e-commerce firms.
Investor confidence was dealt a blow last year when Ant Group, the financial affiliate of technology giant Alibaba, was was forced to suspend its record $35bn planned market debut after coming under intense scrutiny from the Chinese government.
Speaking in Beijing on Friday to mark the listing, JD Logistics chief executive Yu Rui said the scrutiny by regulators would bring it more opportunities as it was differentiating itself by spending on technology.
“We are going to use the funds raised from the IPO to further improve our networks, including in the lower-tier and suburban areas in China, and the infrastructure of the overseas markets,” he said.
In the past year and half Hong Kong has seen a flurry of stock market listings by Chinese technology companies. Last year alone the city saw a total of $49bn raised by IPOs.
It comes as firms choose to sell their shares closer to home as tensions between Beijing and Washington remain high.
In June, JD Logistics’ parent company JD.com raised $4bn on the Hong Kong Stock Exchange, while its heath business JD Health raised $3.5bn at the end of the year.
But there had been also concerns about Hong Kong’s IPO market after a series of tepid performances by new companies, as the city has been rocked by years of protests and political tensions.