JD.com's Smart Supply Chain Reportedly in Talks for IPO

JD Logistics is eyeing a public offering of up to $10 billion in New York or Hong Kong.

Anthony Russo
    Dec 23, 2019 3:20 PM  PT
JD.com's Smart Supply Chain Reportedly in Talks for IPO
author: Anthony Russo   

The logistics arm of JD.com Inc. (Nasdaq: JD) is in discussions with banks regarding a possible initial public offering in Hong Kong or the United States.

The smart supply chain operator is eyeing an IPO of between $8 billion to $10 billion, with a target valuation of at least $30 billion, Reuters reported today. The offering is expected to take place in the second half of 2020, according to the report.

The news sent the stock in JD.com nearly 3% higher on Monday to $36.26 per American depositary share.

Earlier this year, JD.com was reportedly pursuing a public offering of its online grocery and delivery business, Dada-JD Daojia. The company anticipated to raise up to $500 million in New York.

Established in 2007, JD Logistics operates in China nationwide. It built the world's first fully-automated warehouse in Shanghai and continues to enhance drone delivery and automatic robots, according to JD.com's website.

The smart supply chain, which generated nearly 40% of JD's revenue in the third quarter, can deliver 90% of its direct sales within 24 hours in China.

In the three months through September, JD.com said its revenue was $18.9 billion, up 29% year-over-year. Net income was $77 million, or 6 cents per ADS, compared with $419 million, or 30 cents per ADS, a year ago.

In June, JD Logistics launched a $218 million investment fund to help propel companies and technologies focused on logistics.

JD Logistics aims to use the proceeds from its expected IPO for warehouse expansion and potential acquisition purposes, according to Reuters.