JD.com to spin off its shipping arm through a Hong Kong listing

Chinese tech giant JD.com has filed an IPO prospectus for the potential listing of its shipping arm JD Logistics on the main board of the Hong Kong stock exchange.

Photo credit: JD.com

According to the filing, JD.com will still hold more than 50% of the shares in JD Logistics, which will remain as a subsidiary of the Chinese ecommerce major.

“The proposed spinoff would create long-term shareholder value by allowing JD Logistics Group and JD Group to focus on their respective core businesses and to capture different growth fundamentals,” the company said in its filing.

Additional details of the proposed spinoff, including its size, are yet to be completed, JD.com wrote.

The Chinese tech giant joins an IPO rush in Hong Kong where companies are riding the ecommerce boom, fueled by the Covid-19 pandemic as demand for online services spiked.

JD.com’s healthcare unit also recently went public in Hong Kong, raising US$3.48 billion. It was valued at roughly US$29 billion ahead of its IPO.

JD Logistics’ application to the Hong Kong stock exchange follows reports stating that the company is targeting a valuation of US$40 billion after its initial public offering.

It was also previously reported that JD Logistics’ financial debut could net it between US$2 billion and US$3 billion.

See also: Beyond FOMO: Why Grab should race to an IPO fast

Additionally, the company’s fintech arm JD Digits is also looking to go public through a separate listing as it has filed an application to list on Shanghai’s tech-focused STAR Market.