Chinese e-commerce giant JD.com Inc. said it plans to spin off its JD Logistics Inc. shipping business in a listing on the Hong Kong Stock Exchange.
The unit may be valued at about $40 billion, people familiar with the matter had said previously. JD.com will remain a majority shareholder and will realize value from the business in the listing, the company said in a regulatory filing. Details of the proposed spinoff haven’t been finalized, the company said.
Global Covid-19 lockdowns have accelerated a surge in demand for logistics services, as the pandemic kept shoppers out of physical stores and boosted online demand.
Chinese e-commerce sales have increased several fold during this period, making companies that help handle shipping and deliveries particularly attractive, Elysia Tse, head of Asia Pacific research and strategy at LaSalle Investment Management, said in an interview with Bloomberg Television earlier this month.
JD.com made the logistics business, which offers warehousing and distribution services, a separate entity in 2017. JD Logistics operated more than 800 warehouses across China as of Sept. 30.
In an IPO filing to the Hong Kong stock exchange, JD Logistics reported a loss of 71.2 million yuan ($11 million) in the nine months ended September 2020 on 49.5 billion yuan of revenue. That compared with a 996.3 million yuan loss on 34.6 billion yuan of revenue in the same period a year earlier.
BofA Securities Inc., Goldman Sachs Group Inc. and Haitong International Capital are joint sponsors of the proposed logistics unit IPO, according to the preliminary prospectus filed to HKEX.