The share price of China e-commerce company JD.com's health care arm JD Health International Inc. rose more than 60% on its first day of trading after the company raised $3.5 billion in Hong Kong's biggest listing for 2020.
In the first big technology listing since Ant's delayed initial public offering, the virtual pharmaceutical and health care provider sold nearly 340 million shares at $9.11 - giving the company a valuation brushing $29 billion.
JD Health shares opened at $12.19 Tuesday and hit a high of $15.74 after lunch. The issue closed play at $14.71 - about 21% over its open.
Early investors can still exercise a greenshoe option - which would increase the public offering to nearly $4 billion. But demand for shares has far outstripped supply with the retail portion oversubscribed 422 times over, according to the company.
While substantial, Hong Kong's largest initial public offering remains the $4.4 billion listing of JD Health's parent company JD.com.
JD Health is the largest online health care platform and virtual pharmacy by revenue in China according to the company's prospectus filed with the Hong Kong Stock Exchange. It reaped $1.3 billion in the first six months of 2020 - a significant increase from $840 million in the same period last year.
Nearly half of the initial public offering proceeds will be spent on business expansion over the next three to five years. Another 30% will be spent on research and a further 30% will be dedicated to investments and acquisitions.
"Our biggest challenge remains getting more customers to know about JD Health's services and integrating online health care better with offline services," company chief executive Xin Lijun said at a news conference in Beijing.
Xin will work with JD.com after the listing - as the parent company retains controlling shareholder status while welcoming several cornerstone investors including private equity companies Hillhouse and Blackrock and Singapore's sovereign wealth fund GIC.
