JD Digits, the fintech subsidiary of Chinese online marketplace JD.com, is preparing for an initial public offering at China’s Nasdaq-style STAR Market in Shanghai, according to a filing by several securities firms.

Why it matters: The move is part of JD.com’s broader plan to take its affiliates public over the next two years. TechNode reported in May that the e-commerce giant will focus on floating shares of JD Digits and JD Logistics, the company’s courier business, after JD.com’s own secondary listing in Hong Kong in June.

  • JD Digits’ STAR Market listing plan means the new tech board, which opened on the Shanghai Stock Exchange in July 2019, has started to attract internet-based tech companies backed by likes of JD.com and Alibaba. The board has stated a preference for companies from the semiconductor and manufacturing sectors.

Details: Four Chinese securities firms have signed “pre-listing tutoring agreements” with JD Digits on June 28 to help the company file an IPO on the STAR Market, according to a filing to the China Securities Regulatory Commission (CSRC), the country’s top securities watchdog. 

  • The CSRC requires companies to be tutored by qualified brokers before they go public in China’s stock markets. 
  • A JD.com representative declined to comment.

Context: Spun off from JD.com in August 2017, JD Digits is currently valued at RMB 133 billion (around $18.8 billion) after raising RMB 13 billion in 2018.

  • Formerly JD Finance, the affiliate operates a series of loan businesses and provides artificial intelligence and blockchain-based services targeting city governance and agriculture, according to its website.
  • Nasdaq-listed JD.com debuted on the Hong Kong stock exchange on June 18, becoming the third Chinese tech firm to launch a secondary listing in the city following rival Alibaba in September and gaming giant Netease earlier in June.

Writing about semiconductors and telecommunications.