JD Health is gearing up to raise is looking to raise as much as $4 billion through an initial public offering (IPO) on the Hong Kong stock exchange, the Financial Times reports.
It could be one of the biggest IPO of 2020, the news outlet reported, and the first IPO by a major Chinese tech company since China nixed Ant Group’s plans to go public in early November.
JD Health, the healthcare unit of eCommerce giant JD.com, is wasting no time, with hopes of pulling it off next month, in December, before the end of the year, according to the FT.
The move by the huge Chinese eCommerce player to take its healthcare branch public, though, comes just a few weeks after authorities in Beijing surprised the financial sector by nixing plans for a massive, $37 billion IPO by Ant Group.
If successful, JD Health, which sells pharmaceutical drugs and healthcare services through its online platforms, would have the distinction of being the largest IPO of 2020.
The exact size of the IPO, and whether it will reach the $4 billion mark, remain up in the air.
JD Health’s current plans call for an initial sale of $3.5 billion, totaling 382 million shares. That, in turn, would peg a value on JD Health of $28.5 billion.
But if investor demand proves strong, investment bankers working on the deal could activate a so-called “green shoe” option that would allow them to boost the offering by $500 million and raise the total to $4 billion.
And JD Health may benefit from Ant Group’s misfortune, with money that would have gone into the company’s $37 billion IPO still sloshing around Hong Kong, Dickie Wong, head of research at broker Kingston Securities, told the Financial Times.
Also boding well for JD Health is Joe Biden’s victory in the U.S. presidential election, which, combined with a spate of good news on the coronavirus vaccine front, has lifted investors’ spirits.
“The market sentiment [in Hong Kong] is good,” Wong told the FT, with the caveat that “this IPO may not be as hot as Ant Group.”