JD Health, the health care arm of China online retailing company JD.com, might list in Hong Kong as early as later in September, according to sources familiar with the matter as the company looks to raise at least $1 billion.
Speaking with Bloomberg News, a source close to the deal said while details of the listing were subject to change, Hong Kong could host a JD Health listing as soon as December.
Haitong International is among the listing advisers, another source with knowledge of the deal told The Business Times. Bank of America and UBS are listing sponsors, according to news reports.
Parent JD.com completed a secondary listing in Hong Kong three months ago to raise more than $4.5 billion. Meanwhile, JD's health care subsidiary raised more than $830 million from Hillhouse Capital as part of a series B preference share round of financing that valued the company at roughly $12 billion.
"By leveraging Hillhouse Capital's industry expertise and resources, JD Health will further strengthen its pharmacy supply chain capabilities," JD.com said in a statement announcing the funding.
The JD Health app covers a range of medical issues, including heart disease, mental health, diabetes, kidney disease, oncology and maternity. It sells supplements and medicine in addition to providing consultations with doctors.
Earlier this year, JD Health announced the launch of a consultation center for traditional Chinese medicine that will include disease management programs for patients across China, while its Intelligent Otorhinolaryngology Services Centre - specializing in treatment of nose, eye and throat ailments - started accepting patients in June 2020.
JD Health was spun off from JD last year with the parent company remaining its majority shareholder.
Hong Kong's Initial Public Offering Boom
The listing of JD Health is part of a larger flurry of initial public offering activity. Despite a busy few quarters as Hong Kong faced social unrest and pandemic-related closures, the Hong Kong exchange is cementing its place as a hot spot for initial public offerings.
The Hong Kong initial public offering market reached $87.5 billion in the first half of 2020 - a 22% jump in funds raised through listings compared with the same period last year, according to KPMG.
Last month, JD competitor and China retailer Alibaba's health care arm listed on the Hong Kong exchange and raised upward of $1.3 billion - something JD seems poised to replicate.
Outside of virtual health care, biotech startups are also riding Hong Kong's initial public offering wave, boosted by favorable regulations that enable companies in the sector to list with at least one core product in addition to one patent.
In 2019, Hong Kong became the second largest biotech fundraising center in the world - second only to the U.S., according to Dealogic. Notable biotech listings in the last year include Hansoh Pharma, Jinxin Fertility and SinoMab.
"The new economy including biotech companies' listings dominated Hong Kong capital markets in the first half of 2020 representing 77% of the total funds raised," Irene Chu, a partner at KPMG, said late June. "We expect that trend to continue into the second half of the year."