JD Technology, the financial technology arm of Chinese online retailer JD.com, is preparing an IPO that could raise between $1 billion and $2 billion in Hong Kong this year, IFR reported Monday.
Why it matters: JD Technology’s expected listing is one of a number of long-awaited IPOs from Chinese vertical giants, including bike rental app Hello Inc. and podcast platform Ximalaya. The latter two suspended IPO procedures last year after the Didi cybersecurity review put a halt to the overseas listings of Chinese tech giants.
- JD Technology’s possible IPO comes after the company withdrew from a planned Shanghai STAR Market IPO in April 2021 amid antitrust regulations in China’s fintech sector, which led to the halting of Ant Group’s proposed dual Hong Kong and Shanghai IPO.
- JD Technology’s Hong Kong IPO plans could set an example for other IPO candidates as authorities set up clearer regulations for Chinese companies seeking to go public outside the mainland market.
Details: The JD affiliate is discussing the listing with investment banks including Bank of America, CITIC Securities, and Haitong International, according to financial information provider Hithink Royal Flush Information.
- The company declined to comment on the news when contacted Tuesday morning.
- JD Technology’s revenue grew from RMB 9.1 billion ($1.4 billion) to RMB 18.2 billion between 2017 and 2019, according to the company’s prospectus filed with the Shanghai STAR market in 2020.
Context: In 2013, JD spun off its financial technology services to form an independent fintech unit JD Finance, which operates a series of loan businesses and provides AI and blockchain-based financial services. JD Finance was renamed JD Digits in 2018 and then changed its name again in 2021 to JD Technology, as it diversified its business line to include cloud, artificial intelligence, and IoT offerings.
- Last year, JD sold JD Cloud and its artificial intelligence business to JD Digits for a combined valuation of $2.4 billion, before the financial unit changed its name.
- In January, the Cyberspace Administration of China required companies that control data of more than 1 million users to undergo a cybersecurity review before they seek overseas listings. It’s currently unclear whether this new requirement applies to Hong Kong listings that are not deemed to be related to issues of national security.