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Thursday, June 18, 2020, 18:10
E-commerce giant climbs 3.5% in HK debut
By Bloomberg
Thursday, June 18, 2020, 18:10 By Bloomberg

Parcels move along a conveyor belt at a Inc. delivery station in Beijing, April 14, 2020. (GIULIA MARCHI / BLOOMBERG) Inc. soared as much as 6 percent in its Thursday debut in Hong Kong, a solid start that underscores strong investor appetite for a growing line-up of Chinese mainland tech giants seeking to list closer to home.

The mainland online retailer, which already has stock listed in the US, closed at HK$234, up 3.5 percent, after raising US$3.9 billion in its Hong Kong share sale. That’s after its shares changed hands in gray markets at a roughly 5 percent premium to its HK$226 listing price in the days prior.

The mainland online retailer, which already has stock listed in the US, closed at HK$234, up 3.5 percent, after raising US$3.9 billion in its Hong Kong share sale

ALSO READ: JD said to raise US$3.9b in year's second-largest listing

JD's debut is a victory for Hong Kong, coming on the heels of Alibaba Group Holding Ltd.’s US$13 billion share sale. Fellow internet giant NetEase Inc. gained 6 percent in its own Hong Kong coming-out party last week.

The company hoped that investors from the mainland and Asia “can better understand JD’s concept, service and future development,” JD Retail Chief Executive Officer Xu Lei told Bloomberg Television. “Hong Kong is one of the freest economies in the world. We hope to have many mature institutional and individual investors share JD’s growth.”

"We have come to Hong Kong not just because we want to share our promise and development with more clients... but because we have absolute confidence in China and the future of China's economy," Xu said.

JD and its rivals will now put the mainland's nascent consumer spending recovery to the test when they wrap up the mainland's biggest online shopping gala of the post-pandemic era. The mainland's largest retailers are hoping the “6.18” or June 18 extravaganza that began this month unleashed pent-up demand, making up for lost sales during a coronavirus-stricken March quarter.

JD, which initially launched the June 18 shopping carnival, reported its sales reached mouthwatering 239.2 billion yuan by 2 pm on Thursday, exceeding 201.5 billion yuan a year ago.

READ MORE: Mainland online mall files for HK second listing

Global brands and smaller merchants alike stocked up on goods for months in anticipation of the summer event, a bargains buffet surpassed only by the Nov 11 Singles’ Day in scale. JD and Alibaba are expected to release final results of their haul after midnight.

Longer term, the company will use the proceeds of the stock sale to continue building its logistics and delivery network, a key advantage during the pandemic because JD could better control shipping.

“The process to build up a supply chain is very time consuming and cost consuming, but we want to make it better,” Xu said. “When we have better supply chain, it would bring in a better user experience.”

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