Shares in JD Well being, the healthcare unit of Chinese language ecommerce group JD.com, surged as a lot as 75 per cent on their buying and selling debut after the corporate raised $3.5bn in Hong Kong’s largest preliminary public providing of 2020.
JD Well being, which sells prescription drugs and well being providers on-line, trimmed these positive aspects to finish buying and selling 56 per cent greater on Tuesday.
Demand from buyers for shares in JD Well being closely outstripped provide. The corporate offered 339.9m shares at HK$70.58 ($9.11) every, or barely greater than 12 per cent of its share capital, in accordance with a time period sheet. That provides the corporate a market capitalisation of about $44bn.
If bankers train a so-called overallotment choice, which might increase the scale of the providing by 15 per cent, the IPO may surpass $3.9bn.
JD Well being is Hong Kong’s first huge tech itemizing since Chinese language regulators in November stepped in on the final minute to droop funds enterprise Ant Group’s proposed $37bn IPO, which might have been the world’s largest.
Andy Maynard, managing director at China Renaissance Securities in Hong Kong, mentioned the deal was a “landmark transaction” and JD Well being’s shares may rally additional. “We’ve nonetheless obtained plenty of institutional consumers as a result of it was so closely oversubscribed,” he mentioned.
Quantity JD.com raised in its Hong Kong secondary itemizing earlier this 12 months
JD Well being and different Chinese language on-line healthcare platforms together with Ping An Good Physician and Alibaba’s AliHealth have reported surging income and consumer exercise this 12 months. Affected person fears over visiting hospitals throughout the coronavirus outbreak in China brought on on-line consultations to leap in early 2020.
On-line consultations and pharmacies additionally supply a possible strategy to plug longstanding gaps in China’s healthcare protection, the place the very best medical doctors and tools are concentrated in top-tier hospitals within the nation’s huge cities.
Xin Lijun, chief government of JD Well being, mentioned the platform was internet hosting greater than 100,000 on-line consultations a day — a quantity that peaked at 150,000 throughout the top of China’s Covid-19 outbreak.
New authorities insurance policies permitting insurance coverage claims for on-line care and hospitals more and more distributing medicines by way of the web have been different lasting modifications that benefited JD Well being, he added.
“This was not solely a single incident,” Mr Xin advised the Monetary Occasions, referring to the pandemic. “It raised the general commonplace of China’s on-line healthcare.”
JD Well being’s web pharmacy enterprise had 72.5m annual customers final 12 months and its healthcare platform, which permits sufferers to attach with medical professionals over the web, has greater than 65,000 medical doctors.
For the six months to June, JD Well being reported a Rmb5.4bn ($820m) loss on Rmb8.8bn in income, with the latter rising 76 per cent 12 months on 12 months.
JD Well being’s providing comes as Hong Kong’s bourse has been boosted this 12 months by a bumper crop of so-called homecoming listings by Chinese language teams. The Trump administration has been pushing laws that might trigger Chinese language corporations to be delisted from US exchanges.
Nasdaq-listed JD.com raised $4.4bn in a secondary Hong Kong providing earlier this 12 months.
JD Well being is one in every of plenty of subsidiaries of JD.com within the technique of tapping capital markets. JD Digits, a fintech firm, filed for an IPO in Shanghai in September.
Cornerstone buyers for the JD Well being providing included non-public fairness agency Hillhouse, Singapore sovereign wealth fund GIC and asset supervisor BlackRock.
Underwriters on the deal included BofA Securities, UBS and Haitong Securities.
Extra reporting by Wang Xueqiao in Shanghai