March 30 (Portal) – E-commerce firm JD.com Inc (9618.HK) plans to spin off its real estate and industrial units and list them on the Hong Kong Stock Exchange, worth $1 billion each, two Those with direct knowledge said on Friday.
The plan marks the latest overhaul in China’s tech sector following a wide-ranging official crackdown.
In a filing Thursday, JD.com said it would continue to hold more than a 50% stake in the JD Industrials and JD Property units after the proposed spin-off is complete.
JD.com said the scope and structure of its units’ IPOs is ongoing.
Two sources with knowledge of the floats said the two JD entities are looking to raise $1 billion each in the IPO. They declined to be identified as the information is confidential.
The deals would take place as soon as possible depending on the conditions in the financial markets, one of the sources added.
US-listed JD.com shares rose 6% following the news. They have lost more than a third of their value over the past two years as they have been caught up in Beijing’s crackdown on the tech sector.
Rival Alibaba Group (9988.HK) earlier this week announced its own plan to split into six entities and consider fundraising or listings for most of them, in the biggest restructuring in its 24-year history.
In their IPO prospectuses filed later Thursday, JD Industrials and JD Property announced annual revenues of 14.1 billion yuan (US$2.05 billion) and 2.3 billion yuan, respectively.
This isn’t the first time JD.com has tried to reinvent itself.
The Beijing-based company spun off its logistics unit into a separate entity in 2017, and then opened up its delivery and warehousing services to third-party companies.
The business has struggled in recent quarters due to the tough COVID-19 restrictions imposed by Beijing, which hurt consumer confidence.
In January, JD.com announced that it was conducting its e-commerce business in Indonesia and Thailand, where it faced stiff competition from Sea Ltd’s (SE.N) Shopee.
BofA Securities, Goldman Sachs and Haitong are the sponsors of the entities’ IPOs. UBS and Citic Securities are the financial advisors to JD Industrials, while UBS is the financial advisor to JD Property.
($1 = 6.8700 yuan)
Reporting by Twinnie Siu in Hong Kong, Scott Murdoch in Sydney and Tiyashi Datta in Bengaluru; Edited by Sharon Singleton, Maju Samuel and Sonali Paul
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