JD.com to Raise Up to US$4B in Hong Kong Stock Listing

JD.com, China's No. 2 online retailer, plans to raise as much as US$4.05 billion in a Hong Kong stock listing, a media report says.
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JD.com  (JD) - Get Report, China’s second biggest online retailer after Alibaba BABA, reportedly hopes to raise up to HK$31.4 billion (US$4.05 billion) in a listing on the Hong Kong Stock Exchange, as a complement to its Nasdaq listing.

Many Chinese companies listed in the U.S. are considering a domestic listing amid the tension in U.S.-China relations.

The House of Representatives has passed a bill that would require Chinese companies listed in the U.S. to have their audits inspected by U.S. regulators and to disclose whether they are government-controlled. The bill is expected to become law.

JD.com plans to offer 133 million new shares at as much as HK$236 each, according to terms of the deal obtained by Bloomberg. 

That upper limit constitutes a 7.8% premium to JD.com’s Thursday closing price in New York.

JD.com hopes to begin trading in Hong Kong June 18. It plans to use the capital for supply-chain-technology projects.

Alibaba executed a US$13 billion stock offering on the Hong Kong exchange last year.

Morningstar analyst Chelsey Tam is bullish on JD.com, though she thinks it’s already trading at fair value, which she pegs at $56.

“JD delivered impressive first-quarter results, though we caution that the margin improvement amid the coronavirus will subside as people have started to resume their previous lifestyles and reinvestment increases in the rest of the year,” Tam wrote in a commentary last month.

JD.com American depositary receipts recently traded at $58.26, up 3.1%. The stock has risen 29% over the past three months through Thursday’s close.