The company is telling prospective investors that it plans to price 133 million new shares at around HK$226 each, according to the people, asking not to be identified as the information isn’t public.
The indicative price represents a 3.9% discount to the Nasdaq-listed JD’s closing price of US$60.70 per share on Wednesday, JD trades in the US via American depositary receipts, one of which represents two ordinary shares.
JD’s shares are slated to begin trading in Hong Kong on June 18, which coincides with its largest annual online sales event. A representative for the company declined to comment.
At US$3.9bil, JD’s Hong Kong share sale is set to be this year’s second-largest globally, after Beijing-Shanghai High Speed Railway raised US$4.3bil in January, according to data compiled by Bloomberg.
First-time share sales slowed worldwide earlier this year as the coronavirus caused markets to slump and issuers put their listing plans on hold. But activity has been roaring back recently, and last week was the busiest for IPOs in 2020.
NetEase Inc, China’s biggest gaming company after Tencent Holdings Ltd, delivered a solid debut in Hong Kong yesterday, which bodes well for a growing line-up of Chinese tech giants looking to list closer to home.
NetEase soared as much as 10% in early trading.
Escalating tensions between Washington and Beijing are increasing risks for Chinese companies like JD and NetEase that are seeking to broaden their investor base.
Washington has threatened to curtail Chinese companies’ access to US capital markets and promised tougher oversight of their financial reporting, particularly after once high-flying Luckin Coffee Inc crashed amid an accounting scandal.
There have also been fears over the impact of national security legislation set to be imposed on Hong Kong, which has seen the resumption of protests in the city.
The listings of JD and NetEase follow Alibaba Group Holding Ltd’s US$13bil stock sale in the city last year.
Hong Kong lost many of the largest tech corporations to US bourses because it didn’t allow dual-class share voting at the time -- a requirement that has since been relaxed.
Bank of America Corp, UBS Group AG and CLSA Ltd are joint sponsors of JD’s Hong Kong share sale. — Bloomberg
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