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Delayed Hong Kong Stock Exchange  -  05/27 04:08:54 am EDT
341.80 HKD   +2.27%
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Exclusive - China's JD.com targets $2 billion fundraising at logistics unit - sources

01/15/2018 | 07:23am EDT
FILE PHOTO - A JD.com sign is seen during the fourth World Internet Conference in Wuzhen

HONG KONG (Reuters) - China's second-biggest e-commerce firm JD.com has kicked off a fundraising round at its logistics unit with a target of at least $2 billion, and eventually plans to list the business overseas, people with direct knowledge of the matter said.

JD.com, which only trails Alibaba Group Holding Ltd in China's e-commerce market, has invited a select group of investors to join the funding round that values its logistics business, JD Logistics, at around $10 billion, two of the people told Reuters.

The move comes as China's major e-commerce companies are looking to bulk up their logistics businesses to support their global expansion ambitions and boost revenues by offering services to third-party entities.

Chinese investment firm Hillhouse Capital Group and Sequoia Capital China will likely be lead investors of JD Logistics' funding round, while a number of state-owned and international investors have also shown strong interest in the deal, according to the people.

Demand could be strong enough that smaller investors putting up just $100 million - the floor for investments, according to two people - would have to prove they could help the logistics unit to bring in new business, one of them said.

JD.com declined to comment. Hillhouse and Sequoia did not respond to requests for comment. The sources could not be named as the information is confidential.

JD Logistics is currently 100 percent owned by JD.com. It is not clear when and where the IPO process will be undertaken.

Hillhouse Capital is the second-biggest equity investor in JD.com, according to Thomson Reuters data. Alibaba rival Tencent Holdings is also a top-10 investor in JD.com, the data shows.

The fundraising and any ensuing spin-off would give JD Logistics - set up as a separate entity within the company last April - some independence and help it offer services to third-party clients as well as to compete with Alibaba's logistics network Cainiao and delivery services firms such as SF Express, the people said.

Logistics groups have increasingly sought investments to fund work on solutions to supply-chain issues, including autonomous driving, automated warehousing, cross-border logistics and smart logistics services. JD.com, being aggressive in that push, was the first one in China to invest in drones.

Last year, JD.com invested in logistics infrastructure in Southeast Asia, expanding from existing commitments in Indonesia. It also announced a partnership with Japanese delivery firm Yamato Holdings last month to ship products from Japanese retailers to China.

JD.com posted net earnings of 1 billion yuan ($151 million), its highest-ever quarterly profit, in the three months to September 30, confounding analysts' forecasts of a 213 million yuan loss.

The company has a current market cap of $66 billion.

(Reporting by Julie Zhu and Kane Wu in Hong Kong; Additional reporting by Cate Cadell in Beijing; Editing by Jennifer Hughes and Muralikumar Anantharaman)

By Julie Zhu and Kane Wu

© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING LIMITED -2.13% 92.535 Delayed Quote.-20.46%
JD.COM, INC. 0.19% 52.91 Delayed Quote.-24.76%
JUST GROUP PLC -0.42% 82.55 Delayed Quote.-0.84%
LETS HOLDINGS GROUP CO., LTD. 0.79% 6.37 End-of-day quote.-12.74%
LOOK HOLDINGS INCORPORATED 1.78% 1604 Delayed Quote.29.29%
TENCENT HOLDINGS LIMITED 2.27% 341.8 Delayed Quote.-26.84%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) -0.63% 6.6955 Delayed Quote.5.36%
YAMATO HOLDINGS CO LTD -1.36% 2173 Delayed Quote.-18.50%
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Sales 2022 587 B 87 079 M 87 079 M
Net income 2022 117 B 17 412 M 17 412 M
Net cash 2022 92 879 M 13 783 M 13 783 M
P/E ratio 2022 24,2x
Yield 2022 0,42%
Capitalization 2 739 B 406 B 406 B
EV / Sales 2022 4,51x
EV / Sales 2023 3,76x
Nbr of Employees 116 213
Free-Float 62,5%
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Income Statement Evolution
Mean consensus BUY
Number of Analysts 51
Last Close Price 286,90 CNY
Average target price 402,39 CNY
Spread / Average Target 40,3%
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Managers and Directors
Hua Teng Ma Executive Chairman & Chief Executive Officer
Chi Ping Lau Chief Strategy & Investment Officer
Shek Hon Lo Chief Financial Officer & Senior Vice President
Chen Ye Xu Chief Information Officer
Yu Xin Ren COO & President-Interactive Entertainment Group
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