Shares in JD Well being, the healthcare unit of Chinese language ecommerce group JD.com, jumped as a lot as 34 per cent on their buying and selling debut after elevating $3.5bn in Hong Kong’s greatest preliminary public providing of 2020.
The corporate, which sells prescribed drugs and well being providers on-line, trimmed these good points to commerce 24 per cent greater in morning buying and selling on Tuesday.
Demand from traders for shares in JD Well being closely outstripped provide. The corporate bought 339.9m shares at HK$70.58 ($9.11) every, or barely greater than 12 per cent of its share capital, in keeping with a time period sheet. That provides the corporate a valuation of practically $29bn.
If bankers train a so-called over allotment possibility, which might enhance the dimensions of the providing by 15 per cent, the IPO may surpass $3.9bn.
JD Well being is Hong Kong’s first large tech itemizing since Chinese language regulators in November stepped in on the final minute to droop funds enterprise Ant Group’s proposed $37bn IPO, which might have been the world’s greatest.
Andy Maynard, managing director at China Renaissance Securities in Hong Kong, mentioned the deal was a “landmark transaction” and JD Well being’s shares may rally additional. “We’ve nonetheless bought plenty of institutional consumers as a result of it was so closely oversubscribed.”
Quantity JD.com raised in its Hong Kong secondary itemizing earlier this yr
The corporate and different Chinese language on-line healthcare platforms together with Ping An Good Physician and Alibaba’s AliHealth have reported surging income and person exercise this yr. Affected person fears over visiting hospitals throughout the coronavirus outbreak in China triggered on-line consultations to leap in early 2020.
On-line consultations and pharmacies additionally supply a possible option to plug longstanding gaps in China’s healthcare protection, the place the perfect medical doctors and gear are concentrated in top-tier hospitals within the nation’s large cities.
Business medical health insurance, regardless of fast progress, stays unusual in China.
JD Well being’s web pharmacy enterprise had 72.5m annual customers final yr and its healthcare platform, which permits sufferers to attach with medical professionals over the web, has over 65,000 medical doctors.
For the six months to June, JD Well being reported a Rmb5.4bn ($820m) loss on Rmb8.8bn in income, with the latter rising 76 per cent year-on-year.
JD Well being’s providing comes as Hong Kong’s bourse has been boosted this yr by a bumper crop of so-called homecoming listings by Chinese language teams. The Trump administration has been progressing laws that would trigger Chinese language corporations to be delisted from US exchanges.
Nasdaq-listed JD.com raised $4.4bn in a secondary Hong Kong providing earlier this yr.
JD Well being is certainly one of plenty of subsidiaries of JD.com within the strategy of tapping capital markets. JD Digits, a fintech firm, filed for an IPO in Shanghai in September.
Cornerstone traders for the JD Well being providing embody non-public fairness agency Hillhouse, Singapore sovereign wealth fund GIC and asset supervisor BlackRock.
Underwriters on the deal embody BofA Securities, UBS and Haitong Securities.
Extra reporting by Wang Xueqiao in Shanghai