JD.com is working on a secondary listing valued at around $3 billion in Hong Kong, a move that follows Alibaba's lead to be included in the Hang Seng Index of the bustling financial hub, Reuters reported.
The move could allow JD - often referred to as the Amazon of China - to debut its public bid as early as June 18, making it Hong Kong's largest initial public offering for 2020.
Alibaba undertook a secondary listing of its shares in the freefloat-adjusted market-capitalization weighted stock market index late last year, securing nearly $13 billion in the process.
The planned date of listing of the Beijing-based e-commerce giant is its 22nd anniversary, as well as the date of e-tailer's so-called 618 internet shopping festival, the second biggest shopping event in China next to Alibaba's (9988) Singles Day event on November 11, according The Standard, citing a Bloomberg story.
The compiler of Hong Kong's Hang Seng index is loosening its policies for integration in the business center's prominent equities benchmark, opening the door for China's tech behemoths.
Hang Seng Bank's index subsidiary disclosed after the trade's closing bell late Monday that the market would, for the first time, cater to secondary listings and shares with unequal voting rights to be infused to the index.
The Hang Seng benchmark is tracked by nearly $30 billion in exchange traded funds around the world, including local pension funds. The revisions will take effect after a planned evaluation in August.
JD.com's core performance at the moment is impressive, with robust sales growth paving the way to a spike in profit margins, as the online retail giant's rising revenue helps it deal effectively withg high fixed cost fundamentals. JD trades for around 35 times its forward earnings per share, Michael de Oliveira of The Street noted.
JD's self-sustaining logistics infrastructure helped steer the firm through the darkest moments of the global health crisis in China, and the company estimates double-digit revenue growth in the first three months this year.
The online retail conglomerate had $5.7 billion in cash at the end of last year and secured a additional $1 billion in January from the issuance of bonds.
It aimed to debut on the stock market by middle of the year, according to sources with knowledge of the matter. However, one investor revealed the unpredictability of the coronavirus nightmare made the timing less stable.
Meanwhile, WeDoctor, one of the largest online healthcare startups in China, is looking to submit its own IPO in Hong Kong by end of this month and secure around US$1 billion.
On the other hand, Chinese payment technology services provider Yeahka, another company backed by Tencent, kickstarts its IPO today with the goal of securing up to HK$1.64 billion.
In other development, Hong Kong Exchanges and Clearing (0388) will discuss new plans witth stakeholders in the next few days with regards cutting the IPO processing cycle from the current five days, Bloomberg reported, citing sources.
