JD Logistics sells more shares

China’s JD Logistics is to try to raise US $400 million (GBP £300m) in its first follow-on share sale at the Hong Kong Stock Exchange. This is just 10 months after its initial public offering there.

JD Logistics is 63.5% owned by Alibaba rivals JD.com, which may buy US$700m (GBP £500m) at the final share offer price through a wholly owned subsidiary, according to regional media reports.

Currently JD Logistics is controlled by its parent company through subsidiary Jingdong Tech Group. The Chinese logistics giant will use the investment to improve its network and services as well as increasing its cash reserves.

Though one of the biggest players in the massive Chinese parcels market, the firm is loss-making. In 2021 its net loss almost quadrupled to US $2.5bn. It had already warned investors to expect growing losses and that these were set to grow further.

“As an integrated supply chain logistic services player, I don’t think we have direct competitors in (China),” JD Logistics’ chief executive Yu Rui said during the company’s trading debut in Hong Kong.

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