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JD.com to Spin Off Healthcare Unit in Hong Kong IPO

By Eric Volkman – Sep 22, 2020 at 8:30PM

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Some sources say the company is looking to raise as much as $3 billion from the issue.

Chinese e-commerce giant JD.com (JD 3.04%) will spin off its massive JD Health subsidiary in an initial public offering (IPO), the company has revealed in a tersely worded regulatory filing. It will list its shares on the Main Board of the Hong Kong Stock Exchange.

The company has not yet set the timing for the Hong Kong IPO or the subsequent listing. It says both will depend on market conditions, in addition to other considerations. It also hasn't stated how many shares it will sell, and at what price or range.

IPO spelled out in wooden blocks.

Image source: Getty Images.

Anticipating the official announcement, on Sep. 18 Bloomberg published an article that said the company had picked several banks to aid it with the IPO, presumably as the issue's underwriters. Citing "people familiar with the matter, these companies are Bank of America, Hong Kong's Haitong International Securities Group, and UBS Group.

The article's sources said that JD.com was seeking to raise a minimum of $1 billion from the flotation. Another report, from Hong Kong newspaper the South China Morning Post, cited "people familiar with the [IPO] process" as saying that it aimed to reap as much as $3 billion.

JD Health is among an emerging group of companies implementing next-generation healthcare goods and services; it mixes these offerings with more traditional ones. Among its slate of services is telemedicine, which has become the focus of intense investor interest worldwide thanks to the explosion of such media during the coronavirus pandemic.

In its article, Bloomberg cites its own figures as indicating that around $12.7 billion has been raised in fresh stock issues throughout Asia by healthcare companies so far this year.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends JD.com. The Motley Fool has a disclosure policy.

Stocks Mentioned

JD.com Stock Quote
JD.com
JD
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Bank of America Stock Quote
Bank of America
BAC
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Ubs Group Ag Stock Quote
Ubs Group Ag
UBS
$18.17 (-0.33%) $0.06

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