JD Logistics Inc, which was spin off from e-commerce major JD.com Inc, will likely price shares at HK$40.36 ($5.20) in its initial public offering (IPO) at Hong Kong which will be towards the lower end of its flagged range, said reports quoting source information.
The sources were not identified in the reports.
There were also no comments made from JD Logistics.
The company had previously sat a price range of HK$39.36 to HK$43.36 per share which would have allowed the company to raise $3.4 billion when the top range is considered.
Investors and experts have been closely monitoring the pricing of the shares in the IPO to get an indication about the IPO market of Hong Kong, which has done very well in recent times, and whether it has been impacted by the recent volatility in the global markets which has been triggered by the possibility of higher inflation in the global economy.
JD Logistics sold 609.1 million shares in a deal which would be Hong Kong’s second-largest IPO this year following Kuaishou Technology raising $5.4 billion in January. While the price of its shares were priced at the highest point of its range by Kuaishou, the price of the shares of JD Health International Inc, another JD.com spin off, were priced at the top of its range in its IPO in December last year.
The value of JD Logistics would be at $31.6 billion considering that it sold 10 per cent of its total shares in the deal and priced at the bottom of the price range. The value of the company would be about $34 billion if the company sold its shares at the top of its range.
An over-allotment option, or so-called greenshoe, exists to sell a further 91 million shares within 30 days of the shares starting trade.
JD Logistics is slated to launch its IPO at the Hong Kong Stock Exchange on May 28. JD Logistics was created as a spun off company from JD.com in 2017 and then started offering delivery and warehousing services to third party clients.
The logistics company recorded a 64.1 per cent year on year growth in its revenues for the first quarter of the current year with total revenues of 22.4 billion yuan ($3.48 billion). However the company recorded a drop of 72.7 per cent in its gross profit for the same quarter which came in at 230.7 million yuan. The logistics company said that this loss was because of the on-going novel coronavirus pandemic as well as the addition of more than 60,000 workers to its work force during the year.
(Adapted from Reuters.com)