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JD’s Logistics Unit Weighs IPO at $40 Billion Valuation

China’s No. 2 e-commerce giant considers an IPO for its logistics unit.
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“JD.com Inc.’s logistics unit is considering an initial public offering that could raise at least $5 billion,” Bloomberg writes.

Details, Details, Details: JD Logistics plans to go public are still preliminary, and the company could change any of the following factors. But right now, it’s targeting a $40 billion valuation and is “leaning toward choosing Hong Kong as a venue for the IPO.”

In case you didn’t already know, JD.com (also known as Jingdong and formerly 360buy) is China’s No. 2 e-commerce company and a member of the Fortune Global 500. Back in 2017, it spun off its logistics unit, which operates more than 800 warehouses across China, into a separate entity.

Numbers To Consider:

  • Q3 Net Revenue From New Businesses (which includes logistics): $1.7 Billion
  • How That Compares to JD’s Total Q3 Revenue: 6%
  • Total Revenue Through First Nine Months of 2020: $76.8 Billion
  • Operating Profit Through First Nine Months of 2020: $1.7 Billion
  • Total Users: 441 Million

What Else You Need To Know: JD is also looking to raise $3 billion through listing its health care unit, according to Bloomberg News. JD’s fintech affiliate, JD Digits, filed an IPO prospectus back in September with the Shanghai Star Market, though it is “unclear how changes to micro-lending rules will affect the unit’s listing plan.

  • JD also “raised $4.46 billion in a second listing in Hong Kong earlier this year.”

Justin Oh:

JD.com ($JD) is expected to grow revenues at 20-30% going forward and trades at 27.0x analyst projected 2021 EBITDA. Yet that is still a material premium to Alibaba ($BABA) trading at 17.4x and Tencent ($TCEHY) trading at 22.4x the same multiple. Furthermore, as an e-commerce company, JD.com carries much lower margins than the other two…

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