As when spectators thought that market appetite for market debuts begin to sour, JD Logistics proves otherwise. Traders have joined the bandwagon on the biggest initial public offering in Hong Kong Stock Exchange during the year.
E-commerce giant JD.com owns the third-party delivery service. It is barely fifteen years old in circulation at the time of this writing. The company is a go-to service provider among consumers in its home country, China.
It captured more than 90% of the nation’s population due to its same-day delivery service offering to consumers since 2010. It runs more than 1,000 warehouses across different locations and leverages robotics for operational efficiency.
The company’s opening price in HKEX came at HK$40.35 per share. It sold more than 6 million shares, as promised. It managed to share as much as 18% at one point of the session and reached HK$46.05 on its intra-day high.
Such a performance is rather unprecedented after Baidu and Bilibili; both are popular firms in China, stalled during their respective debuts in HK. This ignited the notion that IPOs might be losing some steam into the year after a record-breaking 2020.
Market fears the first starter to lurk after the unprecedented curb on Ant Group IPO back in November.
The back-to-back curbs released by the US regulators and Chinese watchdogs further soured the market appetite for newcomers. Nevertheless, Kuaishou traversed a different path than its counterparts and managed to ascend during its first trading day. Such is also hoped for the courier service and a sustained good performance after that.
Temasek Hopped Into the Bandwagon
Institutional investors did not fail to hop on the bandwagon. Insiders noted that Temasek Holdings, a Singaporean sovereign wealth fund, and billionaire Japanese investor, Softbank, joined in. The firms reportedly bought $1.5 billion worth of shares before retail investors managed to hop in.
Experts in the field noted that JD Logistics would play an imperative role in the rivalry between Alibaba and JD.com. It made a smashing $11.4 billion in revenue back in 2020.
Logistics is important in an increasingly competitive world to capture a greater number of customers in its target market. It should become the e-commerce firm’s “killing weapon” to take on Jack Ma’s ubiquitous entity. Also, JD.com is investing further in its portfolio diversification despite authorities’ clampdown, but logistics remain the center of its game.