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Chinese e-commerce giant JD.com’s delivery arm surges more than 11% in Hong Kong IPO

BEIJING — Shares of JD Logistics, the logistics arm of Chinese e-commerce giant JD.com, soared on Friday as the company debuted on the Hong Kong Stock Exchange.

JD Logistics surged 11.99% in the opening moments of its Hong Kong debut on Friday.

The unit’s vast network of warehouses and delivery workers in China have given JD a competitive edge against its rival Alibaba, as the Beijing-based company can deliver products to millions of customers within the same day, or the next.

JD Logistics raised $3.2 billion in its initial public offering after pricing its shares at 40.36 Hong Kong dollars each, at the lower end of the expected range.

A worker inspects an order at a JD.com delivery station in Yizhuang, Beijing, amid the coronavirus outbreak.

Hilary Pan | CNBC

The unit’s public listing marks the latest in a series for the parent company, after JD.com itself went public in New York and, subsequently completed a secondary listing in Hong Kong. The company’s health unit, JD Health, was also listed in Hong Kong in December.

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Outlook for JD Logistics

“Any failure to retain stable and dedicated labor by us may lead to disruptions to or delays in our services,” the company warned, noting overall tightening in the labor market and rising wages.

Another risk is heavy reliance on the state of the parent company JD.

JD Logistics has been trying to sell its delivery services to third parties. But so far its revenue and business have been tied JD, which accounted for more than 50% of the logistics unit’s revenue last year.

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