JD Logistics, the logistics arm of Chinese ecommerce giant JD.com, has had early talks with banks to raise US$8 billion to US$10 billion in a potential initial public offering overseas, Reuters reported, citing people with direct knowledge of the matter.
Last mile delivery vans from Chinese ecommerce giant JD.com / Photo credit: JD.com
The logistics unit, which is targeting a valuation of more than US$30 billion, will select banks for the IPO in Q2 2020, with the float possibly occuring in the second half of next year, according to the sources.
The people also said that the listing could be in Hong Kong or New York, though the timing has not been finalized.
Based in Beijing, JD began to build its logistics network in 2007 and launched the JD Logistics spin-off in 2017. It offers supply chain and logistics services in the ecommerce industry, including warehousing, transportation, order sorting, delivery, and after-sales services.
It claims to have a network of over 650 warehouses that covers a total of around 16 million square meters, including warehouse spaces managed under the JD Logistics Open Warehouse Platform.
In 2018, JD Logistics raised US$2.5 billion from Sequoia Capital China, Tencent, Hillhouse Capital, China Development Bank, China Merchants Group, and ICBC, valuing the company at about US$13.5 billion.
The company competes against the likes of Cainiao Smart Logistics Network Limited, which got a US$3.3 billion investment from parent Alibaba in November.
The logistics services market in China is forecasted to grow at a compund annual growth rate of 5% from US$1.2 trillion in 2017 to US$1.4 trillion in 2020, according to a report.
Editing by Charmaine de Lazo
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