BEIJING – Shares in JD Logistics, the logistics arm of Chinese e-commerce giant JD.com, rose on Friday as the company debuted on the Hong Kong Stock Exchange.
Shares rose more than 18% at one point after opening at Hong Kong $ 46.05.
JD Logistics has valued its initial public offering at Hong Kong $ 40.36 per share, the lower end of the expected range. The company raised $ 3.2 billion as part of its IPO.
China’s vast network of warehouses and deliverers has given JD a competitive advantage over rival Alibaba as the Beijing-based company can deliver products to millions of customers the same or next day.
An employee inspects an order at a JD.com delivery station in Yizhuang, Beijing during the coronavirus outbreak.
Hilary Pan | CNBC
The unit’s listing is the latest in a row for the parent company after JD.com went public in New York itself and subsequently completed a secondary listing in Hong Kong. The company’s health unit, JD Health, was also listed in Hong Kong in December.
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Outlook for JD Logistics
“Any failure to keep a stable and dedicated workforce from us can cause disruption or delays in our services,” the company warned, noting that the overall labor market is tightening and wages are rising.
Another risk is the strong dependency on the state of the parent company JD.
JD Logistics tried to sell its delivery services to third parties. So far, however, sales and business have been linked to JD, which accounted for more than 50% of the logistics unit’s sales last year.
