JD Well being, the healthcare unit of Chinese language ecommerce group JD.com, will increase as much as $4bn in Hong Kong subsequent month, in what’s more likely to be one of many world’s largest preliminary public choices this 12 months.
The corporate, which sells prescription drugs and well being providers on-line, mentioned an preliminary sale of 382m shares might herald as a lot as $3.5bn, in line with a time period sheet seen by the Monetary Instances. That might worth JD Well being at as much as $28.5bn.
The share sale might enhance to $4bn if bankers execute a so-called inexperienced shoe choice, which might enable them to spice up the providing if investor demand is robust.
JD Well being represents the primary large tech itemizing in Hong Kong since Chinese language regulators suspended funds enterprise Ant Group’s proposed $37bn IPO this month.
JD Well being’s income within the six months to June
Merchants mentioned JD Well being’s IPO would profit from a wave of optimism that has flowed by world markets in current weeks in opposition to the backdrop of Joe Biden’s US presidential victory and the potential for Covid-19 vaccines.
“The market sentiment [in Hong Kong] is sweet,” mentioned Dickie Wong, head of analysis at dealer Kingston Securities, who thinks the itemizing will take pleasure in robust demand from each institutional and retail buyers.
He pointed to the truth that on-line well being providers in China weren’t going through the identical form of regulatory stress as different know-how firms. Beijing this week clamped down on livestreaming teams.
Cash that had flowed into Hong Kong from worldwide buyers forward of Ant’s putative IPO had not left the town and was ready to be put to make use of, Mr Wong added. Nonetheless, “this IPO might not be as sizzling as Ant Group”, he mentioned.
JD Well being, which is able to listing in Hong Kong on December 8, has locked up a number of cornerstone buyers to purchase as much as $1.35bn of its shares. They embody Singapore sovereign wealth fund GIC and asset supervisor BlackRock.
The corporate’s web pharmacy enterprise had 72.5m annual customers final 12 months and its healthcare platform, which permits sufferers to attach with medical professionals over the web, has over 65,000 docs.
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.com holds an 81 per cent stake in its subsidiary and can keep management after the share sale. JD has beforehand spun out models equivalent to JD Digits, its finance enterprise, and JD Logistics, bringing in exterior buyers.
JD.com raised practically $4.5bn by a secondary providing in Hong Kong earlier this 12 months, one in a slew of “homecoming” listings by large US-listed Chinese language tech teams. They might finally be compelled to delist in New York because of laws working its method by Congress.
JD Well being mentioned it could use the IPO proceeds for functions together with increasing its enterprise and analysis and improvement.
Underwriters on the deal embody BofA Securities, UBS and Haitong Securities.