HONG KONG -- The logistics unit of Chinese e-commerce platform JD.com has secured about $1.5 billion in commitments from SoftBank Vision Fund, Singapore government investment fund Temasek and five other cornerstone investors as it heads for a public listing, two people familiar with the deal said.
JD Logistics plans to open its Hong Kong initial public offering for general orders as early as Monday, seeking to raise as much as $3.5 billion.
SoftBank Vision Fund has agreed to buy $600 million of JD Logistics shares and Temasek is set to tip in more than $200 million, the people said. One added that U.S. investment group Blackstone is also among the cornerstone investors.
The support should boost one of the most anticipated offerings in Hong Kong this year. It may also help re-energize the city's IPO market, which has shown signs of fatigue recently after initially getting off to its fastest start to the year ever.
Companies raised $20 billion via new listings in Hong Kong in the first four months of the year, compared with $2.33 billion over the same period last year, according to the city's stock exchange. But several offerings have slumped below their issue price and subscription levels have been falling.
The 2.6 billion Hong Kong dollar ($334.72 million) IPO of SF Real Estate Investment Trust, a unit of courier company SF Holdings, drew orders for five time the shares on offer to retail investors, the issuer disclosed Friday, compared with multiples of close to 100 for some offerings earlier this year.
Institutional investors subscribed for three times the shares allotted to them, versus the typical double-digit multiple.
JD Logistics, which offers supply-chain services from warehousing to distribution, has trimmed its targeted IPO valuation to $35 billion from about $40 billion after pre-offering meetings with investors and stock market turmoil over the past two weeks.
Hong Kong's benchmark Hang Seng Index declined 2.1% this week after falling for three of five trading days. JD Logistics wrapped up its pre-IPO meetings on Wednesday.
JD Logistics, which started as the in-house logistics unit of JD.com in 2007, was China's largest integrated supply-chain logistics services player by revenue in 2020, according to its IPO application. Its revenues rose 47.2% last year to 73.4 billion yuan ($11.37 billion).
It plans to use proceeds from the IPO to upgrade and expand its service network and develop its technology.
China's integrated supply-chain logistics services industry is expected to grow from 2.02 trillion yuan in revenue in 2020 to 3.2 trillion yuan by 2025 amid the digitalization of the economy, the company said.
JD Logistics has 190,000 corporate customers across industries including consumer goods, apparel, home appliances, home furniture, automotive and fresh produce.
The company's net loss widened to 4 billion yuan in 2020 from 2.2 billion yuan a year earlier, according to its latest filing with the Hong Kong exchange. It expected the loss to widen significantly in 2021 due to accounting changes, higher expenses and reduced gross margins, it said.
The listing will make it the third group company with shares traded in Hong Kong. Nasdaq-listed JD.com, its parent, raised $4.5 billion last June via a secondary listing while JD Health raised $3.9 billion in a December IPO.