JD.com Readies Hong Kong Listing -- WSJ

By Joanne Chiu 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 30, 2020).

Chinese e-commerce giant JD.com Inc. filed a confidential application to list in Hong Kong, moving a step closer to a stock sale as early as June, according to people familiar with the matter.

The Beijing-based online retailer, already listed on the Nasdaq Stock Market, is targeting a $2 billion share sale for its secondary listing in Hong Kong, one of the people said. JD.com declined to comment.

JD.com's American depositary shares have climbed around 24% this year, defying the broad coronavirus-driven slump. The company has benefited from surging online sales during the pandemic -- in China especially -- as the closing of many physical stores and curtailing of domestic and international travel left people shopping at home.

The company, whose wares range from appliances and computers to apparel and food, said in March that it expected first-quarter sales to be up at least 10% from the year-earlier $18 billion. For 2019 as a whole, revenue topped $82.9 billion, with net income of $1.8 billion.

JD.com is likely to report first-quarter results in May.

The plan to list in Hong Kong follows larger rival Alibaba Group Holding Ltd.'s listing there last November, which raised $13 billion. Alibaba's shares surged in the days and weeks that followed, benefiting investors in both Hong Kong and New York.

JD.com went public in the U.S. in 2014, a few months before Alibaba, and its shares have more than doubled since then, making its market capitalization as of Tuesday about $64 billion.

The size of the company's Hong Kong stock sale will depend on market conditions and its U.S. share price as the secondary listing nears. The shares Alibaba sold in Hong Kong represented less than 3% of its U.S. market capitalization at the time.

JD.com's secondary stock sale is being led by Bank of America Corp. and UBS Group AG.

A Hong Kong listing would bring JD.com closer to its home market and attract more investors familiar with its business. It would also be a win for Hong Kong's stock exchange in these turbulent times.

In 2018 the exchange operator changed its rules to admit companies with unequal voting rights, and said it would also allow large Chinese companies listed in the U.S. or London to add a secondary listing in the city. The changes have drawn the initial public offerings of some of China's most prominent technology companies, including Meituan Dianping and Xiaomi Corp., and investment bankers say more businesses already listed abroad may look to follow in Alibaba's footsteps.

In addition to JD.com, the U.S.-listed Chinese tech companies that market participants expect will seek secondary listings in Hong Kong include search-engine operator Baidu Inc., online travel agency Trip.com and NetEase Inc., China's second-biggest gaming firm.

Write to Joanne Chiu at [e-mail]

(END) Dow Jones Newswires

April 30, 2020 02:47 ET (06:47 GMT)

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